22 Analyse one reason why a sole trader may find it difficult to raise finance.

[Fatima ibtehaj]

[KN]A sole trader may find it difficult to raise finance because banks and investors see them as high risk
[APP]For example, if a sole trader who owns a small café wants to borrow money to buy new equipment, the bank might be hesitant because the café and the owner’s personal assets (like their house or car) might not be enough to cover the loan if the business fails
[AN]This limits the sole trader’s ability to invest and grow their business compared to larger companies that can raise money by selling shares or using bigger assets as collateral

[Hajra]

K: A sole trader may find it hard to raise finance because they cant sell shares.
App: For example, if someone runs a small bakery, they can only use their own savings or borrow from banks or family.
An: This limits the money they can collect, makes banks less willing to lend as risk is high, and slows down business growth compared to bigger firms.

[Mustafa Khan]

KN]sole trader is the sole investor in the business.
app]this means the entrepreneurs source of investment is his savings and small amount of bank loan.
an]It will reduce their chances of survival, difficult to grow and hence it will not be able to compete with its competitors.

[Abdullah Mohsin]

[KN] Banks may be unwilling to give out loans to a sole trader
[APP] This is because they would be uncertain if the business could pay back the loan as the sole trader has limited assets and no partners to support with debts.
[AN] This makes it harder for the sole trader to expand, leading to competitor businesses increasing in size, decreasing the market share of the business and making it even more difficult for it to raise finances.

[Mahnoor satti]

[KN] Sole traders which are new or small businesses face difficulties due to unlimited liability.
[APP] As banks do not easily lend to sole traders because of the small business size and there is a risk that they wont be able to pay back hence they will find it hard to raise finance.
[AN] Moreover a start up already had a lot of expenses and as sole trader had only one owner its investment is also small that could lead to finance problem.

[M huzaifa jillani]

(KN)
A sole trader may find it hard to raise finance because they cannot sell shares to investors.
(APP)
For example a small clothing shop owner in lahore cannot invite share holders like a private limited company such as khaddi can.
(AN)
This means the sole trader depends only on personal savings or bank loans .If the bank sees the business as risky it may refuse to lend limiting growth.

[Ruqyia Salman]

[KN] Sole traders may struggle to raise finance because they cannot sell shares to investors.[APP] For example, if a sole trader running a clothing shop wants to expand, they can only rely on personal savings or bank loans.
[AN] This limits growth opportunities, as banks may view them as risky and charge higher interest, making it harder to compete with larger businesses.

[Uqbah hadeed kayani]

[kn] A sole trader may struggle to raise finance because they rely only on personal savings or small loans.
[app] For example, someone running a small barber shop might not have enough collateral to convince banks to lend money.
[an] This limits business growth opportunities, makes expansion slower, and increases financial pressure since lenders see the business as risky without shared ownership or large assets.

[sarah_naeem]

[KN]: Sole traders may find it difficult to raise finance as banks see them as high risk.
[APP]: For example, if a sole trader needs loan from the bank the bank may refuse them as a sole trader has unlimited liabilities and the bank fears that they will not be able to repay the loan as there is high risk of failure in such small businesses.
[AN]: Thus, this limits the sole trader's ability to expand the business which would also reduce the competitiveness of the business in the market which further leads to business failing quicker and hence poor living standard of the sole trader.

[Haiderabbas]

KN: Sole traders may struggle to raise finance because they lack formal structure and reputation.
APP for e.g. a small shop owner is refused a bank loan because there’s no company history or assets to secure it.
AN: This shows that lenders worryy when there are no bussiness records or security. Without shares or investors funding options are limited. This restricts expansion and d forcess reliance on personal savings or expensive credit.

[Areeba Arshad]

[KN] A sole trader is a business owned and managed by one person who has unlimited liability.
[APP] For instance, a small bakery run by a single owner might struggle to get a loan from a bank.
[AN] This is because banks see sole traders as high-risk borrowers, since the business depends entirely on one person’s ability to repay, leading banks to either refuse loans or charge higher interest rates to cover the risk.

[Tuqwa]

(KN):A sole trader is a small business owned and run by one person who has unlimited liability.
(App):A sole trader may find it difficult to raise finance because banks often view such businesses as high risk. Since the business depends on one person and has unlimited liability there is a higher chance of failure or inability to repay loans.
(AN)As a result banks may refuse to lend money or charge higher interest rates making it hard for the sole trader to expand or invest in new equipment.

[Tahoor Yousaf]

{KN} A sole trader is the one somley responsible for investing capital into a business without any additional partnerships. {APP} For example a business going towards bankruptcy, there would only be one sole person trying to fund it and banks wont let it loans as it would be a risker investment. {ANL} Hence sole traders would only have to rely on there own savings leading to financial pressure deteriorating the profits of the company leading to limited expansions and growth in the future.

[Daris]

KN: A sole trader may find it difficult to raise finance because banks see this type of business as high risk.
APP: For example, since the business depends on one person and has unlimited liability, there is a higher chance it could fail if the owner becomes ill or makes poor decisions.
AN: This makes banks less willing to lend money, or they may only offer loans with high interest rates. As a result, the sole trader has limited funds to expand the business, slowing down growth and competitiveness.