write about different sections of people who take loans and advances from the banks
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Answer:
Money is an essential element for any business, because it fulfills the short term and long term requirement of funds. It is nt possible for the owner to bring all the money himself, so he/she take recourse to loans and advances. Loans refer to a debt provided by a financial institution for a particular period while Advances are the funds provided by the banks to the business to fulfill working capital requirement which are to be payable within one year.
The loan amount is required to be repaid along with the interest, either in lump sum or in suitable instalments. It can be a term loan (payable after 3 years) or demand loan (payable within 3 years). In the same waty, advances also requirement repayment along with the interest within one year. These two terms are always uttered in the smae breath, but there are a number of differences between loans and advances which we have discussed in the article below.
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