General Education Development (GED) Practice Exam

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Prepare for the GED Test with our comprehensive quiz. Includes multiple choice questions and detailed explanations to boost your confidence. Ace your GED exam!

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What is a potential advantage for a small business in obtaining a business loan?

Immediate financial relief from debts
Access to more capital for expansion
Removal of competition in the market
Lower interest rates for all loans

The correct answer is: Access to more capital for expansion

Access to more capital for expansion is a significant advantage for a small business obtaining a business loan. When a small business secures a loan, it gains immediate access to a larger sum of money than what might be available from its current revenue or savings. This capital can be strategically used for various growth initiatives such as purchasing new equipment, hiring additional staff, enhancing marketing efforts, or even opening new locations. Investing in these areas can lead to increased production capacity, improved service offerings, and the potential for greater overall revenue. Unlike immediate financial relief from debts, which is a reactive measure, securing a loan for expansion is a proactive approach that positions the business for future growth and success. The other options, such as removal of competition or lower interest rates, do not directly relate to the practical benefits a small business would experience from obtaining a loan, especially in the context of growth and development of the business itself.