Final answer:
A firm that wants to guarantee that money is available to them if and when they should need it may consider a line of credit.
Step-by-step explanation:
A firm that wants to guarantee that money is available to them if and when they should need it may consider a line of credit. A line of credit is an agreement between a borrower and a financial institution that allows the borrower to access funds up to a certain limit. It provides flexibility and convenience for a firm to borrow money as needed.
For example, a business may set up a line of credit with a bank, which gives them access to a predetermined amount of funds. If the business needs money for unexpected expenses or to cover cash flow gaps, they can draw from the line of credit.
The advantage of a line of credit is that the firm only pays interest on the amount they borrow, and they have the flexibility to repay and reuse the funds as needed. It serves as a safety net for a firm to have money available when they require it.