The principle of self liquidating debt

The material requires students to explore the Tri Linc Global and Black Rock Impact Bond funds and evaluate investment strategies.

This type of lending and credit extension tends to be counterproductive and adds a substantial cost (including opportunity cost) instead of value to an economy, as it tends to burden production.Self-liquidating credit is usually a loan needed for the production of (capital) goods or provision of services, and it is for a fairly short to intermediate time period.Due to its nature, the use of such credit generates the financial returns and cash flow that enables the loan repayment and adds value to an economy.Although money no longer has an intrinsic value, it does have four very valuable functions that facilitate the functioning of an economy and a society: it serves as a medium of exchange, unit of account, store of value and standard of deferred payment.Types of Credit Credit, and the extension of credit, is the ability of a debtor to access cash to accomplish goals of a financial or non-financial nature.Deflation, on the other hand, can be thought of as the opposite of inflation, or as negative inflation, and it occurs when the supply of goods or services rises faster than the supply of money.Deflation and Its Causes Deflation manifests itself as a simultaneous sustained contraction or decline in: The precursor or precondition of deflation can be a recessionary period (which can deteriorate to an economic depression), during which there is either an excessive extension of credit or a huge assumption of debt.Credit comes in two different forms and each form works and impacts the debtor differently.The two types of credit are self-liquidating and the non-self-liquidating credit.The case discusses the Tri Linc Global Impact Fund's (Tri Linc Global's) unique structure and how it addresses capital-shortage problems in global SME finance.The case opens with Abena Dede looking at the request for proposal from a new potential client, Yohan Van den Berg.

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