Question

Why is the size of sole proprietorship generally remains small?

Answer 1

financial institutions hesitate to provide long term loan to a sole proprietor and hence, the sizeof the business generally remains small.

Answer 2

Answer:

The resources of a sole proprietorship is limited to his/her savings and the borrowing capacity which is also limited. The banks and financial institutes hesitate to give them loan as they doubt whether the sole proprietor will able to repay the loan or not. Hence, the size of the sole proprietorship is generally small due to the limited resources

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