Question

What are the advantages of borrowing from commercial banks?

Answer 1

1. Banks provide funds to business firms as and when needed. Timely financial assistance is available.
2. Banks keep the information given by borrowers confidential. The secrecy of business is maintained.
3. Banks are an easier source of funds because issues of prospectus and underwriting formalities are not involved.
4. A bank loan is a flexible source of finance, as the loan amount can be increased or repaid as per the needs of business.