ENTREPRENEURIAL FINANCE
DEBT FINANCING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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In which circumstance should you use debt financing
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When there is an emergency and you need money immediately
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When you have time and don’t need the money right now
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Either A or B
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None of the above
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Explanation:
Detailed explanation-1: -Trade credit facilitates the purchase of supplies without immediate payment. Such credit appears in the records of the buyer of goods as ‘sundry creditors’ or ‘accounts payable’. Trade credit is commonly used by business organisations as a source of short-term financing.
Detailed explanation-2: -There are a few situations in which debt financing would be preferable. Acquiring companies that are seeking smaller amounts of funding and hope to obtain this funding more quickly will often pursue debt financing as opposed to equity funding.
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