Question

loan from financial institutions (borrowed fund -long -term​

Answer 1

The three disadvantages of borrowing funds from specialized financial institutions are :

• Certain restrictions such as restriction on dividend payment are imposed on the powers of the borrowing company by the financial institutions.

• The concern requiring finance from special financial institutions has to submit itself to a thorough investigation.

• The high interest rates charged by the financial institutions which makes this form of finance very extravagant