Bank Loans - Borrowing a fixed amount of money from a bank and paying it back over a period of time with interest
Advantages:
- Guaranteed money for the duration of the loan
- Interest charges for a loan are usually lower than an overdraft
- Only pay the loan and interest back, nothing else
Disadvantages:
- Difficult to arrange as banks will only lend the money if they feel the entrepreneur will be able to pay them back
- Entrepreneur may have to pay a charge if they decide to pay back early
- Repayments can be made difficult for the business if the cash flow is slow
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