Buying an existing business is beneficial because: a. it does not require a large initial capital. b. it has an established relationship with lenders. c. it does not need to be nurtured. d. it has financial support from the government.

Question

Business

Jaylee Braun

3 April, 11:04

Buying an existing business is beneficial because: a. it does not require a large initial capital. b. it has an established relationship with lenders. c. it does not need to be nurtured. d. it has financial support from the government.

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Answers (1)

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Raina · Answer 1

Buying an existing business is beneficial because it does not require large initial capital.

Option a

Explanation:

The idea of buying an existing business is much easier than that of starting a business. Buying an existing business includes lesser risks. When we are buying a business, it means that we are taking over an operation that is already generating some profits or cash flows.

Moreover, it does not need enormous amount of capital since, majority of the setups will already be there and all we have to do is just to reconstruct and maintain it. We cannot be sure that whether the previous business holder had professional financial dealings with the government side so, it sometimes may become our duty to initiate the papers and get financial support from the government if required.

In addition, there are cases in which the lenders that the previous owner dealt with will not be the same as ours. Therefore, the answer would be option a.