Sexchatroms - Self liquidating loan define

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A business might use a self-liquidating loan to purchase extra inventory in anticipation of the holiday shopping season.

The revenue generated from selling that inventory would be used to repay the loan.

Most car loans are of the simple interest variety -- which is a good thing.

The other type of car loan -- pre-computed loans -- are rarely used and should be avoided.

Collins English Dictionary - Complete & Unabridged 2012 Digital Edition © William Collins Sons & Co.

A type of short- or intermediate-term credit that is repaid with money generated by the assets it is used to purchase.

The "simple" in a simple interest loan means that interest is only calculated on the outstanding principal balance.

Simple interest does not compound and increase the loan balance.

The repayment schedule and maturity of a self-liquidating loan are designed to coincide with the timing of the assets' income generation.

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