Which of the following reflects the advantage of obtaining bank debt?

The advantage of obtaining bank debt, particularly when considering lower costs for long-term investments, revolves around the interest rates associated with bank loans. When a business secures a loan from a bank, particularly for a long-term investment, it typically benefits from lower interest rates compared to alternative financing options like credit cards or payday loans. This lower cost of borrowing can significantly reduce the total expenses associated with financing a project, making it more affordable and allowing businesses to allocate funds to other important areas.

Long-term bank debt often allows for fixed interest rates, which can lead to predictable repayment amounts over time, assisting in budgeting and financial planning. This predictability can further support the long-term stability and growth of a business, making banking loans a viable option for financing substantial projects or investments.

In contrast, options highlighting higher interest rates for short-term needs, less paperwork, and immediate cash access do not reflect the inherent advantages of bank debt, as these aspects can often be associated with alternative financing channels or do not necessarily align with the core benefits of traditional bank loans.