Exam 15: Sources of Debt Financing

The common short-term loan is for one year,often repaid sooner,and repaid in one lump sum.

________ is/are an asset-based financing technique.

Over the past 30 years,SBICs have provided over $13 billion in financing to some 80,000 small businesses.

A(n)________ is a hybrid between a conventional loan and a bond;at its heart it is a bond,but its terms are tailored to the borrower's individual needs,as a loan would be.

The average SBA loan guarantee is $150,000 and has an average duration of seven years.

Because private investors are willing to take greater risks than banks,they are more willing to finance deals through private placements than are banks.

The most common form of secured credit is:

Explain the different SBA loan programs.Explain how a typical SBA loan guarantee works.What interest rates do such loans normally carry?

The most common type of commercial bank loan granted to small businesses is:

The average microloan is for $25,500 with a maturity of 37 months (the maximum term is six years).

The SBA's ________ program offers short-term capital to growing companies seeking to finance seasonal buildups in inventory or accounts receivable.

47% of small business owners rely on banks as their source of start-up capital.

The Farmers Home Administration only makes loans to small farms.

Three lenders play a role in every 504 loan: a bank,the SBA,and a certified development company (CDC).

Which of the following businesses would be eligible for an SBA loan?

Inventory-only deals are the easiest form of asset-based financing to obtain because banks like to have "tangible" assets backing a loan.

________ is a method of financing frequently employed by retailers of "big ticket items"-autos and major appliances.

Loans from a stockbrokerage on the small business owner's portfolio can be "called" to be paid within a matter of days or even hours.

Amortization schedule is:

An SBIC can lend up to 40% of its private capital to a single client.