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The debts still exist in theory, at least until the statute of limitations has expired, but there is no debtor to pay them, so they must be written off in practice.

Conservation groups, for example, can gain the ability to maintain biodiversity in sensitive wildlife habitats and they can eventually choose to resell some of their holdings in order to finance the purchase of more environmentally significant natural resources.

These loans are intended to finance purchases that will quickly and reliably generate cash.

A business might use a self-liquidating loan to purchase extra inventory in anticipation of the holiday shopping season.

The revenue generated from selling that inventory would be used to repay the loan.

Self-liquidating loans are not always a good credit choice.

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