Bank Loans As A Source Of Finance Flashcards
(3 cards)
1
Q
What is a bank loan ?
A
A long term , external of finance which is availble to all forms of business owners.
2
Q
What are the disadvantages and advantages of using bank loans of a source of finance ?
A
Advantages; repayments are spread out over a period of time , fixed installments to help with cash flow management
Disadvantages; the length of the loan and the interest rates can make it expensive , the lender may require security on the loan
3
Q
What company are you using for bank loans ? Explain their story.
A
The grass centre;
-Experienced rapid growth from increased demand after coivd.
-Struggled to keep up with orders
-Expading to a larger warehouse
-Despite steady profits , not enough capital to cover costs
-took out a 300,000 pound loan over 5 years
