Three varieties of bank loans available to businesses. (1) Line of Credit (2) Revolving Loan Agreement (3) Discount Interest Loan. Furthermore, some of these loans may feature a restriction known as a compensating balance. If you owned a business, which type would you prefer and why? When might you find that your negotiating position with the bankers only makes the less desirable type of loan available to you, and what makes this second choice less desirable? What actions can you take as the owner or CFO to strengthen your negotiating position before shopping for a loan?