Short & Long term finance Reading

What is the primary purpose of short-term finance for a business?

• To maintain a positive cash flow

• To expand the business

• To invest in new technology

• To hire more employees

Which of the following is a common feature of a bank overdraft?

• Fixed interest rates

• Flexibility

• No repayment required

• Guaranteed approval

What is a disadvantage of using share capital as a source of finance?

• It dilutes control for the founders

• It requires regular interest payments

• It is only available for small businesses

• It cannot be used for long-term projects

What is a key advantage of retained profit as a source of finance?

• It incurs no interest charges

• It requires a guarantor

• It is only available for large businesses

• It must be repaid within a fixed period

Which of the following is a disadvantage of crowdfunding?

• The business must be interesting

• It provides opportunities for individuals

• It acts as a form of market research

• It is easy to reach the funding target

What is required for a business to obtain a bank loan?

• A guarantor is always required

• No credit checks are needed

• The business must secure its assets against the loan

• The interest rate is always variable