What type of financing do Revenue Anticipation Notes provide?

Revenue Anticipation Notes (RANs) are a specific type of short-term financing mechanism that municipalities use to manage cash flow shortages. They are issued in anticipation of future revenues — typically from taxes, grants, or other income streams. This type of note allows municipalities to meet their immediate financial obligations while waiting for those revenues to be collected.

By accurately matching the financing needs with the timing of revenue inflows, RANs help to ensure that the municipality can continue operations without disruption, making option B the correct choice. The short-term nature of RANs is key; they are not intended for long-term financing of capital projects or infrastructure, nor do they serve as emergency loans for budgets that have not been approved. Instead, they provide the liquidity needed to bridge the gap between expenditures and the timing of expected revenues.