Choosing a location, and collateral for a loan
Two early choices shape a new business: where to set it up, and how to raise the money to start. Lenders usually ask for collateral, an asset they can take if a loan is not repaid. Paper 1 asks about collateral more often than almost anything else in this subject.
By the end of this page you can
- Explain why a mine, a market stall and a borrower’s house matter to a new business
- Outline the factors that decide where a business is located
- Put the steps of getting a loan secured by collateral in order
- Define collateral, default, infrastructure and extractive industry
- Explain what collateral does for the lender and for the borrower
Goals tick themselves off as you try the activities below.
Photo: raguleo, CC BY 3.0, via Wikimedia Commons. Cropped, shipping-line names on the containers blurred, resized, JPEG q74.
A business that imports its supplies or exports its goods saves time and money near a good port.
How often it shows up in past papers
All papers23 of 23 papers
Last 55 of 5 · 2023–2026
Paper 1 counts come from our past-paper bank of CSEC Principles of Business Paper 1s. The last-5 row shows how often it came up in the five most recent papers.
Inside this topic
- Where and howLocked
- Six location factorsLocked
- A secured loangameLocked
- Key termsLocked
- Test yourselfmarkedLocked
- Practise for real · 26 past questionsLocked