The tendency of 90% of technology and media companies failing within the first three years likely leads to the conclusion that these companies’ loans have higher interest rates. Lenders may perceive these companies as higher risks due to their high failure rate, resulting in higher interest rates to compensate for that risk.
About 90% of technology and media companies fail within the first three years of business.
Question
Use the passage to answer the question.
How does this tendency affect the loans granted to new technology and media companies?
(1 point)
Responses
These companies’ loans are smaller.
These companies’ loans are smaller.
These companies are unable to obtain loans.
These companies are unable to obtain loans.
These companies’ loans have higher interest rates.
These companies’ loans have higher interest rates.
These companies are loaned money by many different institutions.
These companies are loaned money by many different institutions.
1 answer