Question

__________ are a way bank lenders ensure that credit line financings are being used for short-term or seasonal needs. Group of answer choices Annual clean-ups Debt covenants Commitment fees Compensating balances Road shows g

Answer 1

Answer: Annual clean-ups

Step-by-step explanation:

Annual clean-ups require that customers borrowing from the bank using credit lines keep their balance at $0 for some parts of the year for instance 30 - 60 days.

This way the bank can ensure that credit line financings are being used for short-term or seasonal needs because the borrower would then pay when they have excess cash reserves and only borrow when they need cash.