One advantage for a business when it receives a loan is improved cash flow. By securing additional funds through a loan, businesses can meet their immediate financial obligations and cover expenses such as payroll, rent, and inventory purchases. This helps businesses maintain a smoother cash flow and avoid any potential disruptions or late payments.
One disadvantage of taking a loan is the obligation to repay the borrowed amount along with interest. This adds to the overall debt burden of the business and can impact its profitability in the long run. Additionally, if the business fails to make timely repayments, it can damage its creditworthiness and make it harder to secure loans in the future.
describe one advantage and one disadvantage for a business when it receives a loan
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