Exam 12: A Firm S Sources of Financing

Renata has asked her family members to help her launch her new business.  She must consider that:

Private placement

Companies that have business dealings with a new firm are possible sources of funds for financing inventory and equipment.

Andrew is a venture capitalist who would like to find a good new business in which to invest.  He's done this before so he has learned to limit his investing to firms with potentially high returns in a _____ period.

Small business investment companies (SBICs)

Martina wants to expand her business.  She will need to buy a larger facility and equip it with additional machinery.  She should look into the SBA loan program that provides long-term financing for small businesses to acquire real estate or machinery and equipment called the:

Debt financing as opposed to equity financing allows owners to retain voting control of the company.

For every firm, there is a "right" answer to the question of balancing debt and equity, and it is important that the small business owner find that balance.

A balloon payment