banks like to make short-term self-liquidating, Financial Management

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banks like to make short-term self-liquidating

Banks like to make short-term, self-liquidating loans to businesses. Why?

Banks like can see where the funds are likely to come from such that the borrower is able to use to make the necessary loan payments. Short term, self-liquidating loans perform this since the borrowed funds are used to purchase assets that generate the needed funds.

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