Which arrangement allows businesses and individuals to purchase now and pay later?

The correct answer, credit, allows businesses and individuals to make purchases immediately while deferring the payment to a later date. This commonly occurs through credit cards, loans, or lines of credit, where a buyer can access goods or services without having the full amount upfront. The individual or business effectively borrows funds to complete the purchase, with an agreement to pay back the lender over time, often with additional interest. This mechanism enables consumers to manage cash flow more effectively, allowing for larger purchases that might otherwise be unattainable if payment were required at the time of purchase.

In contrast, a payment plan typically involves an agreement to pay for items in installments but normally follows a set schedule. Layaway requires customers to make payments in advance for items that are held until fully paid, meaning the product is not received until the total price is settled. Cash on delivery is a payment method where the buyer pays for goods at the time they are delivered, which does not allow for deferred payment. Therefore, credit stands out as the method that facilitates immediate acquisition with the flexibility to pay later.