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True or False: When a new company doesn't have enough collateral for a loan, they're required to keep a minimum balance in account.

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Final answer:

When a new company doesn't have enough collateral for a loan, they may be required to keep a minimum balance in their account as a reserve requirement.

Step-by-step explanation:

In order to obtain a loan, a new company may be required to provide collateral. However, if the company does not have enough collateral, they may be required to keep a minimum balance in their account as an alternative. This is known as a reserve requirement.

Reserve requirements are mandated by the Federal Reserve and require banks to keep a certain percentage of depositors' money on reserve. Banks may also choose to keep additional reserves above the required amount for their own security.

Therefore, the statement is true. When a new company doesn't have enough collateral for a loan, they may be required to keep a minimum balance in their account as a reserve requirement.

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