Loan

• what is a loan

  A sum of money is borrowed and repaid (with interest) over a determined period of time
• How secure are banks loan and how are they repaid?

  banks loans are unsecured and are typically repaid over two to ten years
• benefits of a loan

  Interest rates are fixed for the term of the loan

  Repayments are made in equal instalments, helping budgeting

  big businesses are likely to be able to pay a low interest rate
• Drawbacks of a loan ?

  Harder for small businesses to get a loan as it is seen as a risk

  Non current liabilities are increased in the balance sheet Interest rates depend on the businesses credit rating