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  3. lenders typically set limits on revolving lines of

Lenders typically set limits on revolving lines of credit (revolvers). Even though these limits are...

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Accounting

Lenders typically set limits on revolving lines of credit (revolvers). Even though these limits are set by lenders, we allow financial models to borrow more than these limits. A model alert is then used to determine whether the revolver limit has been exceeded. Which statement below best describes the reason we allow financial models to borrow a revolver amount over the limit set by the lenders? Lenders allow revolver limits to be exceeded, provided that the outstanding balance is paid off in a reasonable amount of time. Revolver limits are not mandatory and only suggested guidelines from the lenders. This prevents the model from flipping into a negative cash balance. This puts pressure on the lenders to extend the limit on the revolver to a more reasonable amount

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