Which two of the following statements about business financing are correct? A.Grant finance is a very popular source of business finance for start-ups because government rules ensure that no more than 3% interest can be charged on the amount granted.
B. From the point of view of the lender, a secured loan is less risky than an unsecured loan.
C. Grant finance normally requires repayment within five years.
D. The guarantor of a loan guarantees that he or she will repay the loan should the borrower be unable to repay it.

Question

Quizplus · Accepted Answer

Statement A is incorrect as there are no government rules specifying the interest rates for grant finance since grants are typically non-repayable funds. Statement C is incorrect as grant finance does not require repayment at all. Statement D is incorrect as the guarantor of a loan is only responsible for repaying the loan if the borrower is unable to do so, but it is not a guarantee that they will repay it. However, statement B is correct as a secured loan is less risky for the lender since the borrower must provide collateral in case of default.

Which Two of the Following Statements About Business Financing Are