Exam 14: Sources of Financing

PEMD is a program that helps companies develop international business.

What does a banker evaluate to determine a company's capacity to repay a bank loan?

IRAP specializes in matching people in need of work with small service companies.

Maurizio's wants to import authentic olive oil from Italy for his world food venture.He creates a website to raise the required capital through crowdfunding.If the money raised is sufficient each contributor would receive a bottle of the authentic olive oil.What approach to crowdfunding did Maurizio use?

Jaspreet is requesting a loan from his company's bank.The bank manager is very happy when Jaspreet needs financing.Her bank has been helping her grow her business for the past 11 years and Jaspreet has never missed a loan payment.What interest rate will the manager offer Jaspreet?

Jasper needs $1,000 quickly to pay for booth space at a very prestigious trade show.Her friends and family have already loaned her money and she has no business assets.How should Jasper pay for the trade show?

A banker will offer the prime rate to a borrower that has a questionable credit history.

Caitlin is studying entrepreneurship and interviews a business owner.She asks the owner how she financed the preparation of the business plan.What would the business owner's response most likely be?

Barclay financed the purchase of inventory from suppliers by borrowing money from his company's bank.A condition of the loan was the requirement for Barclay to provide monthly financial statements to the bank's manager.What is the condition called?

What is the traditional way to locate business angels?

In the rewards approach to crowdfunding,supporters receive a percentage of ownership of the new venture.

What is the most frequent source of financing?

An entrepreneur needs cash in a hurry and sells her accounts receivable to a firm for fee.This is an example of factoring.

Identify and describe the four basic firm characteristics that significantly affect how a business is financed.

What does CSBFP stand for?

At a meeting of major stock holders a decision is made to finance expansion to overseas markets by issuing more shares and not taking a long-term note with the company's bank.One of the stock holders opposed this decision but was out-voted.Why would this stock holder oppose this decision?

The owner of a printing company has arranged an asset-based loan to purchase a new cutting machine.The bank will use the cutting machine as collateral for the loan.

Having been turned down by her bank for a business loan,Pauline creates a website to invite the general public to invest in her organic lunch service for school children.What kind of financing is this called?

The owners of an amusement park want to finance the purchase of a new roller coaster using the roller coaster as collateral for the financing.What type of arrangement should the owners make with their bank?

Leasing is a way to provide a hedge against equipment obsolescence.