Banking · Credit Facilities
Which of the following best defines a Deferred Payment Guarantee (DPG)?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It is a working capital financing option used by businesses to meet short-term liquidity needs through supplier credit.
- 2It is a fund-based credit facility that allows the buyer to defer payment for fixed assets, with no risk to the bank.
- 3It is a type of term loan in which the bank provides funds directly to the supplier for fixed asset purchases.
- 4It is a non-fund-based financing arrangement where a bank guarantees repayment for the purchase of fixed assets as per an agreed payment schedule.✓
Correct answer
It is a non-fund-based financing arrangement where a bank guarantees repayment for the purchase of fixed assets as per an agreed payment schedule.
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