One example of a self-liquidating asset would be the construction of a building or toll bridge for use in a city or town.

For example, a company may use a self-liquidating loan to pay for its inventory, which it intends to quickly sell.A type of short- or intermediate-term credit that is repaid with money generated by the assets it is used to purchase.The repayment schedule and maturity of a self-liquidating loan are designed to coincide with the timing of the assets' income generation.During the busy season when business is booming the company needs to borrow money to finance short-term assets such as inventory and accounts receivable.The company borrows money to buy more materials to take advantage of the increasing demand of the busy season.See Also: Loan Agreement Collateralized Debt Obligations When is an interest rate not as important in selecting a loan?Debt Ratio Analysis Debt Service Coverage Ratio (DSCR) The term “self-liquidating loans” is banker slang.