When small firms need loans, the most frequent source of funding is
A) Credit cards.
B) Commercial bank loans.
C) Trade credit.
D) Home equity loans.

Question

Quizplus · Accepted Answer

Commercial bank loans are the most frequent source of funding for small firms due to the availability of various options such as lines of credit, term loans, and SBA loans. Credit cards may have high interest rates and limited credit availability, while home equity loans may not be feasible or desirable for many small businesses. Trade credit may be a viable option for established businesses with strong relationships with suppliers, but may not be as accessible for new or growing businesses.

When Small Firms Need Loans, the Most Frequent Source of Funding