This question asked for a discussion of the factors to be considered by a company when choosing a source of debt finance, and the factors to be considered by a provider of finance when deciding how much to lend. Many answers gained high marks here.

Where answers did not gain high marks, it was usually because they did not focus on “the factors to be considered”, such as interest rate, security, maturity, risk, profitability and so on, but discussed instead different sources of finance (including equity, even though the question asked about debt). Given the question, a balanced answer was being looked for, i.e. one that discussed factors from a borrower perspective and a lender perspective.