The advantages of loans and advances raised from banks by business firm are as follows:
(a) Loan and advances can be arranged from banks in keeping with the flexibility in business operations. Thus business may be run efficiently with borrowed funds from banks for financing its working capital requirements.
(b) Loans and advances are utilized for making payment of current liabilities, wages and salaries of employees, and also the tax liability of business.
(c) Bank loans and advances are found to be convenient as far as its repayment is concerned.
(d) Loans and advances by banks generally carry element of secrecy with it.