Fred started his new landscaping business with a commercial loan. He uses his credit card to pay for weekly supplies such as fertilizer and mulch
Business growth has been slow and Fred is having a difficult time keeping up with his monthly loan and credit card payments. He is now considering borrowing against his home to stay current with his initial loan and for other needed expenses. Fred's business is MOST at risk because ________.A) Fred has not acquired enough customers
B) Fred's home may not have enough equity to qualify him for an additional loan
C) Fred is taking on too much debt
D) Fred's business does not have enough revenue
E) Fred is too lenient on the terms of collection
C
Explanation: C) While Fred's business may be at risk for a number of reasons, the most significant risk factor is that he has taken on too much debt relative to his business's income.
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