When businesses take on too much debt to finance growth or experience a business event such as an increase in the cost of commodities, an option of last resort is

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Although few businesses and individuals intentionally fail to repay (or default on) their debts, sometimes they cannot fulfill their financial obligations. Businesses may take on too much debt in order to finance growth, or business events such as an increase in the cost of commodities can bankrupt a company. An option of last resort in these cases is bankruptcy, or legal insolvency.

When Businesses Take on Too Much Debt to Finance Growth