Business Studies Multiple Choice Question – 25 February 2018

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Which ONE of the following is an advantage of using a bank loan to finance a business?

Choose ONE answer only:

  1. Less flexible than overdrafts
  2. Regular interest payments are incurred
  3. Collateral is often required to offer as security for the loan
  4. Relatively difficult to arrange
  5. Cannot be recalled before the agreed date

Explain one disadvantage to a business of using a bank loan to finance a business?

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Business Studies KS4 classes.

The answer is 5 – As long as a business can produce evidence that the loan is likely to be repaid within the time agreed, they are relatively straightforward to arrange. In addition, unlike overdrafts, they cannot be recalled before the agreed date. The other three options are all disadvantages of bank loans.

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