25. Bank loans, commercial paper, and medium-term notes (S25.3–S25.4) Complete the passage below by selecting the most appropriate terms from the following list:

floating lien, revolving credit, medium-term note, warehouse receipt, unsecured, commitment fee, commercial paper.

Companies with fluctuating needs for cash often arrange a with their bank that allows them to borrow up to a specified amount. In addition to paying interest on any borrowings, the company must pay a on any unused amount.

Secured short-term loans are sometimes covered by a , which gives it a general claim on the firm’s assets. Generally, however, the borrower pledges specific assets. For example, a loan may be secured by inventory. In this case, an independent warehouse company provides the bank with a , showing that the goods are held on the bank’s behalf and releases those goods only on instructions.

Banks are not the only source of short-term debt. Many large companies issue their own debt directly to investors, often on a regular basis. If the maturity is less than 270 days, the debt does not need to be registered with the SEC and is known as . A company may also have a program to sell longer maturity debt to investors on a continuing basis. This is called a program.