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Question
What are the advantages of borrowing from commercial banks?
Solution
- Banks provide funds to business firms as and when needed. Timely financial assistance is available.
- Banks keep the information given by borrowers confidential. The secrecy of business is maintained.
- Banks are an easier source of funds because issues of prospectus and underwriting formalities are not involved.
- A bank loan is a flexible source of finance, as the loan amount can be increased or repaid as per the needs of business.
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