What term describes small amounts of money that can be borrowed more easily than by a traditional bank loan?

What term describes small amounts of money that can be borrowed more easily than by a traditional bank loan?

• A. Micro loans
• B. Seed capital
• C. Venture funding
• D. Business grants

Answer: (A)

The correct term for small amounts of money that can be borrowed more easily than through a traditional bank loan is micro loans. Micro loans are typically designed to support small businesses and entrepreneurs who may not have access to conventional lending due to a lack of credit history or collateral. These loans usually involve smaller amounts, making them more manageable and less risky for lenders. Micro loans often come with flexible repayment terms and lower interest rates compared to traditional loans, which encourages entrepreneurship, especially in underserved communities. They serve as a vital financial tool for individuals looking to start or expand a small business without undergoing the lengthy and stringent application processes typical of larger financial institutions. Other options refer to different types of funding. Seed capital is used primarily to support the initial phase of a new business or startup, venture funding involves larger investments typically aimed at businesses with high growth potential, and business grants provide funds that do not need to be repaid but often have specific eligibility criteria and conditions.

The correct term for small amounts of money that can be borrowed more easily than through a traditional bank loan is micro loans. Micro loans are typically designed to support small businesses and entrepreneurs who may not have access to conventional lending due to a lack of credit history or collateral. These loans usually involve smaller amounts, making them more manageable and less risky for lenders.

Micro loans often come with flexible repayment terms and lower interest rates compared to traditional loans, which encourages entrepreneurship, especially in underserved communities. They serve as a vital financial tool for individuals looking to start or expand a small business without undergoing the lengthy and stringent application processes typical of larger financial institutions.

Other options refer to different types of funding. Seed capital is used primarily to support the initial phase of a new business or startup, venture funding involves larger investments typically aimed at businesses with high growth potential, and business grants provide funds that do not need to be repaid but often have specific eligibility criteria and conditions.