Question

A small restaurant wants to expand, but first it needs to raise funds. John wants to raise

capital through debt financing, but his partner, Damien, isn't sure that's a good idea. What is
one downside of debt financing that Damien could cite to prove his point to John?
O They will have to pay interest on the borrowed amount
O Shareholders will own part of their business.
O They will need to sell stock in their business.
O They will be required to repay the money immediately.

Answer 1

they will have to pay interest on the borrowed amount.

Step-by-step explanation:

debt finance involves an ongoing interest expense that can negatively impact cash flow in tough times .