- A large firm has several financial advantages because it is large, well known and becomes a more credit-worthy borrower than a smaller firm, This means:
A large firm can borrow money from a number of different sources, to buy new machines, etc. Large firms may also be able to raise money from the general public by selling them shares through a stock exchange
- Large firms may own more assets than a small firm, like machinery, factories and offices, that they can offer to the lenders in case of the unlikely event that they cannot repay the loan. Because this event is so unlikely financial institution are they willing to lend money to large firms.
- Because large firms represent such low risk borrowers, financial institutions may not charge them so much interest on their loans.
- Dan Moynihan & Brian Titey. (2015). Economics, A Complete Course for IGCSE and O Level: University of Cambridge International Examination.
- Google Pict. Borrowing, Lending(Accsess on October 18,2015)
- Google Pict. Assets (Accsess on October 18,2015)
- Google Pict. Represent(Accsess on October 18,2015)
Dan Moynihan & Brian Titey. (2015). Economics; A Complete Course for IGCSE and O Leel. 2015. hlm 236