Borrowing from family and friends is a common source of debt financing for a start-up business.

Question

Quizplus · Accepted Answer

This is true. Borrowing from family and friends is a common way for start-up businesses to obtain financing, especially if they are unable to secure funding from traditional sources such as banks or investors. However, it is important to approach these loans as a formal business transaction and to have a clear agreement in place to avoid damaging personal relationships.

Borrowing from Family and Friends Is a Common Source of Debt