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State two advantages and two disadvantages of a bank overdraft as a source of finance to a business.

      

State two advantages and two disadvantages of a bank overdraft as a source of finance
to a business.

  

Answers


Martin
Advantages of bank overdraft

- Lower interest rate
- No security/collateral required by bank
- Flexibility – available when required.

Disadvantages

- Amount of borrowing is restricted.
- Possible change in interest rate without notice.
- Borrower must be an account holder with the bank.
- Legally repayable on demand.

marto answered the question on February 12, 2019 at 07:58


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