What is one challenge faced by sole traders compared to corporate entities?

Sole traders face the challenge of unlimited liability, which means that they are personally responsible for all the debts and financial obligations of their business. This can be particularly daunting because if the business fails or takes on debt, the sole trader's personal assets—such as their home or savings—are at risk. This is in stark contrast to corporate entities, where liability is typically limited to the amount invested in the company, providing shareholders protection from personal loss beyond their investment in the business.

In comparison, the other options present different contexts that do not reflect the inherent challenges faced by sole traders. For instance, the ability of a business to continue after the owner's death pertains more to corporate entities and their structure, where ownership can be transferred or inherited. Additionally, access to loans is usually more challenging for sole traders compared to corporations, which benefit from more established credit histories and perceived lower risk. Finally, raising capital is generally easier for corporations due to their ability to issue shares and attract investment from a larger pool of investors. Thus, the correct answer underscores a significant risk associated with operating as a sole trader.