Question

The financial manager of carolina graphics negotiated a ________ with her bank that allows carolina to borrow up to $50,000 without collateral. this arrangement eliminates the need to renegotiate the terms of the loan and complete new paperwork each time carolina borrows money. the preapproved short-term loan agreement is contingent upon the bank having the funds available

Answer 1

Line of Credit.

A line of credit between a bank and a company enables the company to borrow funds upto a certain amount that is mutually agreed upon ($50,000, in this case) without having to go through lengthy loan disbursement procedures. However, the company can access these funds only if the bank has funds available for this purpose.