Question 1

A recent Small Business Administration study found that commercial banks provide between ________ percent of the credit available to small businesses.

Accepted Answer

A) 40 to 50 
B) 50 to 60 
C) 60 to 70 
D) 70 to 80 
A) 40 to 50 
B) 50 to 60 
C) 60 to 70 
D) 70 to 80 C

Question 2

Because of the risk/return tradeoff,small businesses that borrow money repay it with interest at the:

Accepted Answer

A) prime interest rate. 
B) prime interest rate minus a few percentage points. 
C) prime interest rate plus a few percentage points. 
D) lender's cost of capital. 
A) prime interest rate. 
B) prime interest rate minus a few percentage points. 
C) prime interest rate plus a few percentage points. 
D) lender's cost of capital. C

Question 3

In most SBA loans,the SBA does not actually lend any money; it merely guarantees a bank repayment of a portion of the loan the bank makes in case the borrower defaults.

Accepted Answer

A) True 
 B)False  True

Question 4

The maximum number of shares a company can sell under a SCOR is:

Accepted Answer

A) 200,000. 
B) 10,000. 
C) 100,000. 
D) 1,000,000. 
A) 200,000. 
B) 10,000. 
C) 100,000. 
D) 1,000,000.

Question 5

For small businesses,________ are the very heart of the financial market,providing the greatest number and variety of loans to small companies.

Accepted Answer

A) commercial banks 
B) factors 
C) commercial finance companies 
D) credit unions 
A) commercial banks 
B) factors 
C) commercial finance companies 
D) credit unions

Question 6

A ________ 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.

Accepted Answer

A) private placement 
B) industrial revenue bond 
C) 504 loan 
D) zero coupon bond 
A) private placement 
B) industrial revenue bond 
C) 504 loan 
D) zero coupon bond

Question 7

Which of the following restrictions does the SBA impose on a Section 504 CDC loan?

Accepted Answer

A) For every $35,000 the CDC loans,the project must create at least one new job or achieve a public policy goal. 
B) Machinery and equipment financed must have a useful life of at least 10 years. 
C) The borrower must be a "small business" and must not have a tangible net worth in excess of $7 million and a net income in excess of $2.5 million for the preceding two years. 
D) All of the above 
A) For every $35,000 the CDC loans,the project must create at least one new job or achieve a public policy goal. 
B) Machinery and equipment financed must have a useful life of at least 10 years. 
C) The borrower must be a "small business" and must not have a tangible net worth in excess of $7 million and a net income in excess of $2.5 million for the preceding two years. 
D) All of the above

Question 8

Factors typically discount ________ percent of the face value of a company's accounts receivable.

Accepted Answer

A) 5 - 40 
B) 10 - 20 
C) 60 - 95 
D) 95 - 100 
A) 5 - 40 
B) 10 - 20 
C) 60 - 95 
D) 95 - 100

Question 9

Explain the difference between equity capital and debt capital.What advantages and disadvantages characterize each?

Accepted Answer

• Equity financing represents the person

Question 10

Angels fill an important role in equity financing of a small business.Discuss their role,their typical profile,and how to find an angel.

Accepted Answer

Angels are wealthy investors,often entre

Question 11

The largest single source of external equity capital for small businesses is:

Accepted Answer

A) angels. 
B) venture capitalists. 
C) Small Business Administration loans. 
D) the stock market; i.e.,"going public." 
A) angels. 
B) venture capitalists. 
C) Small Business Administration loans. 
D) the stock market; i.e.,"going public."

Question 12

In discounted accounts receivable financing,a small business can typically borrow an amount equal to ________ percent of its receivables it pledges as collateral.

Accepted Answer

A) 10 - 25 
B) 35 - 50 
C) 55 - 80 
D) 80 - 95 
A) 10 - 25 
B) 35 - 50 
C) 55 - 80 
D) 80 - 95

Question 13

A small company needs fixed capital to purchase its permanent assets.

Accepted Answer

A) True 
 B)False

Question 14

For small businesses going global,the SBA offers this program with a one-page loan application.

Accepted Answer

A) Export Working Capital (EW
C) Program 
B) International Capital Expansion (IC
E) Program 
C) International Trade Program 
D) CAPLine Program 
A) Export Working Capital (EW
C) Program 
B) International Capital Expansion (IC
E) Program 
C) International Trade Program 
D) CAPLine Program

Question 15

Lending practices at credit unions are very much like those at banks,but credit unions usually are willing to make smaller loans and will loan only to their members.

Accepted Answer

A) True 
 B)False

Question 16

A company involved in an initial public offering may sell its shares of stock before the effective date of the offering as long as the investors are accredited.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is not an asset-based financing technique?

Accepted Answer

A) Discounting accounts receivable 
B) Inventory financing 
C) Term loan 
D) None of the above 
A) Discounting accounts receivable 
B) Inventory financing 
C) Term loan 
D) None of the above

Question 18

When financing a small company's purchase of real estate,a bank typically will lend up to 75 to 80 percent of the property's value and will allow repayment schedules of 10 to 30 years.

Accepted Answer

A) True 
 B)False

Question 19

Entrepreneurs using a Small Company Offering Registration (SCOR)can advertise their companies' stock offerings and can sell them directly to any investor with no restrictions and no minimums.

Accepted Answer

A) True 
 B)False

Question 20

When the SBA makes a loan guarantee,banks are willing to consider riskier deals that they normally would refuse.

Accepted Answer

A) True 
 B)False

A recent Small Business Administration study found that commercial banks provide between ________ percent of the credit available to small businesses.

Because of the risk/return tradeoff,small businesses that borrow money repay it with interest at the:

In most SBA loans,the SBA does not actually lend any money; it merely guarantees a bank repayment of a portion of the loan the bank makes in case the borrower defaults.

The maximum number of shares a company can sell under a SCOR is:

For small businesses,________ are the very heart of the financial market,providing the greatest number and variety of loans to small companies.

A ________ 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.

Which of the following restrictions does the SBA impose on a Section 504 CDC loan?

Factors typically discount ________ percent of the face value of a company's accounts receivable.

Explain the difference between equity capital and debt capital.What advantages and disadvantages characterize each?

Angels fill an important role in equity financing of a small business.Discuss their role,their typical profile,and how to find an angel.

The largest single source of external equity capital for small businesses is:

In discounted accounts receivable financing,a small business can typically borrow an amount equal to ________ percent of its receivables it pledges as collateral.

A small company needs fixed capital to purchase its permanent assets.

For small businesses going global,the SBA offers this program with a one-page loan application.

Lending practices at credit unions are very much like those at banks,but credit unions usually are willing to make smaller loans and will loan only to their members.

A company involved in an initial public offering may sell its shares of stock before the effective date of the offering as long as the investors are accredited.

Which of the following is not an asset-based financing technique?

When financing a small company's purchase of real estate,a bank typically will lend up to 75 to 80 percent of the property's value and will allow repayment schedules of 10 to 30 years.

Entrepreneurs using a Small Company Offering Registration (SCOR)can advertise their companies' stock offerings and can sell them directly to any investor with no restrictions and no minimums.

When the SBA makes a loan guarantee,banks are willing to consider riskier deals that they normally would refuse.

The Foundations of Entrepreneurship

Inside the Entrepreneurial Mind: From Ideas to Reality

Designing a Competitive Business Model and Building a Solid Strategic Plan

Conducting a Feasibility Analysis and Crafting a Winning Business Plan

Forms of Business Ownership

Franchising and the Entrepreneur

Buying an Existing Business

Building a Powerful Marketing Plan

E-Commerce and the Entrepreneur

Pricing Strategies

Creating a Successful Financial Plan

Managing Cash Flow

Choosing the Right Location and Layout

Global Opportunities

Building a Team and Management Succession

Filters

Exam 13: Sources of Financing: Debt and Equity

A recent Small Business Administration study found that commercial banks provide between ________ percent of the credit available to small businesses.

Because of the risk/return tradeoff,small businesses that borrow money repay it with interest at the:

In most SBA loans,the SBA does not actually lend any money; it merely guarantees a bank repayment of a portion of the loan the bank makes in case the borrower defaults.

The maximum number of shares a company can sell under a SCOR is:

For small businesses,________ are the very heart of the financial market,providing the greatest number and variety of loans to small companies.

A ________ 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.

Which of the following restrictions does the SBA impose on a Section 504 CDC loan?

Factors typically discount ________ percent of the face value of a company's accounts receivable.

Explain the difference between equity capital and debt capital.What advantages and disadvantages characterize each?

Angels fill an important role in equity financing of a small business.Discuss their role,their typical profile,and how to find an angel.

The largest single source of external equity capital for small businesses is:

In discounted accounts receivable financing,a small business can typically borrow an amount equal to ________ percent of its receivables it pledges as collateral.

A small company needs fixed capital to purchase its permanent assets.

For small businesses going global,the SBA offers this program with a one-page loan application.

Lending practices at credit unions are very much like those at banks,but credit unions usually are willing to make smaller loans and will loan only to their members.

A company involved in an initial public offering may sell its shares of stock before the effective date of the offering as long as the investors are accredited.

Which of the following is not an asset-based financing technique?

When financing a small company's purchase of real estate,a bank typically will lend up to 75 to 80 percent of the property's value and will allow repayment schedules of 10 to 30 years.

Entrepreneurs using a Small Company Offering Registration (SCOR)can advertise their companies' stock offerings and can sell them directly to any investor with no restrictions and no minimums.

When the SBA makes a loan guarantee,banks are willing to consider riskier deals that they normally would refuse.

The Foundations of Entrepreneurship

Inside the Entrepreneurial Mind: From Ideas to Reality

Designing a Competitive Business Model and Building a Solid Strategic Plan

Conducting a Feasibility Analysis and Crafting a Winning Business Plan

Forms of Business Ownership

Franchising and the Entrepreneur

Buying an Existing Business

Building a Powerful Marketing Plan

E-Commerce and the Entrepreneur

Pricing Strategies

Creating a Successful Financial Plan

Managing Cash Flow

Choosing the Right Location and Layout

Global Opportunities

Building a Team and Management Succession

Filters