Question

PLEASE HELP!! Which is a disadvantage of debt financing

Fluctuations in the currency exchange market can lead to ballooning interest payments.

Paying for the interest on a loan makes it the most expensive form of financing available.

Banks are usually unwilling to fund a business in its early stages of development.

Securing a loan involves a lot of paperwork and an extremely lengthy approval process.​​​

Answer 1

Answer:

Banks are usually unwilling to fund a business in its early stages of development.

Explanation:

Considering the available options, the disadvantage of debt financing is "Banks are usually unwilling to fund a business in its early stages of development."

Given that debt financing is a means by which a firm raises money or capital to finance the business operation. For example, debt financing is usually bank loans, personal loans, loans from family or friends, etc.

However, the biggest source of debt financing is Banks, and often time, they usually "unwilling to fund a business in its early stages of development."