What type of loan is secured by accounts receivable and inventory, which a bank can require repayment at any time?

The type of loan that is secured by accounts receivable and inventory, allowing a bank to require repayment at any time, is known as a revolving credit. This financial arrangement provides businesses with a flexible credit line they can draw from as needed, making it particularly advantageous for managing cash flow. With revolving credit, companies can utilize their receivables and inventory as collateral, which mitigates the bank's risk and offers the business access to funds without the need for a reapplication process each time they need additional capital.

Revolving credit is distinct in that it typically involves an ongoing loan facility, where borrowers can withdraw, repay, and withdraw again, up to a designated credit limit. This flexibility is particularly useful for businesses that may experience fluctuations in cash flow on a regular basis. In contrast, a term loan involves borrowing a fixed amount that is repaid over a specified period, and a secured loan is a broader category that refers to loans backed by collateral but does not inherently include the repayment terms that allow a bank to demand repayment at any time. A bridge loan serves a different purpose, typically providing temporary financing until long-term funding is secured.