Which ONE of the following is an advantage of using a bank loan to finance a business?
Choose ONE answer only:
- Less flexible than overdrafts
- Regular interest payments are incurred
- Collateral is often required to offer as security for the loan
- Relatively straightforward to arrange
- Can be recalled before the agreed date
Explain one advantage to a business of using a bank loan to finance a business?
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This is multiple choice question is suitable for Business Studies KS4 classes.
The answer is 4 – 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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