WT13_Overdraft and Trade credit

What is an overdraft?

• A type of crowdfunding

• When a firm withdraws more money than it has in its account

• An agreement to pay suppliers later

• A loan with fixed interest rates

What is a key advantage of trade credit?

• It allows immediate cash transactions

• It guarantees discounts on purchases

• It provides an interest-free means of raising funds

• It requires payment upfront

Which of the following is a disadvantage of crowdfunding?

• There is strong competition for attention

• It is always free of fees

• It allows businesses to maintain full control

• It is a guaranteed source of funding

What happens if a business exceeds its overdraft limit?

• They must pay back the overdraft immediately

• They receive a lower interest rate

• They may incur higher additional costs

• They are automatically granted more funds

What is a potential risk of a failed crowdfunding campaign?

• The business can relist the project

• It indicates a poor business plan

• It guarantees future funding opportunities

• It results in a refund of fees paid