ENTREPRENEURIAL FINANCE
SOURCES OF FUNDING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which two of the following are advantages to a start-up business of using an overdraft? Select two answers:
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Guaranteed funds from the bank for every start-up
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Interest rates will always stay the same increasing business certainty
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It provides flexibility to a business when it is short of cash
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It will never be recalled at very short notice
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Interest is only charged when used
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Explanation:
Detailed explanation-1: -A business overdraft provides you with access to additional funds up to an agreed amount that you can use as and when you need to. They can help with cashflow issues and unexpected expenses, and may be preferable to a business loan because you only pay interest on the overdraft balance.
Detailed explanation-2: -The two types of bank account overdrafts are authorized and unauthorized overdrafts.
Detailed explanation-3: -Available cash. An overdraft loan gives you immediate access to extra funds when you don’t have any left. You’re in control. Only pay for what you use. There are no monthly costs. Keep yourself covered.
There is 1 question to complete.