Term Answer Description Seasonal dating A. If the borrower cannot repay the loan, the lender can liquidate certain assets. Collection policy B. An example of this credit policy decision is "2/10, net 30." Credit standards C. A borrower is required to hold a certain amount of money in an account at the lender’s institution. Cash discounts D. Banks often require this to offset loss if an owner or manager dies. Loan guarantees E. A firm has particular requirements that must be met before credit is extended to customers. Collateral F. This type of discount is used most often in seasonal businesses. Key-person insurance G. If payment is not received by a certain date, many firms will employ a collection agency to collect overdue accounts. Discount interest loan H. Often, banks will require the owners of a small business to sign personally for the debt of the company. Compensating balances I. The face value of the loan includes both the amount received and the calculated interest. Add-on interest J. This is a loan in which the borrower prepays the interest.