Exam 13: Sources of Financing: Debt and Equity

Unlike entrepreneurs of the past,today's entrepreneurs:

Banks prefer to make loans to business start-ups because although the risk level is higher,the potential returns are also much higher.

Corporate Venture Capital accounts for approximately 6 to 8 percent of all venture capital.

The majority of loans provided by the SBA are:

SBICs provide financing to small businesses that are at least 51 percent owned by minorities or socially or economically disadvantaged people.

Since their stock offerings are small,most entrepreneurs are able to take their companies public without the assistance of accountants,attorneys,and underwriters.

A business owner does not pay interest on a floor-planned item in inventory until it is sold.

Only about half of the companies that attempt a public stock offering ever complete the process.

Entrepreneurs are most likely to give up more equity in their businesses in the ________ phase of their companies than in any other.

Selling the small company's accounts receivable outright to another business is called:

When a bank proves the quality of its loan decisions to the SBA and becomes a ________ lender,the bank makes the final lending decision itself,subject to SBA review.

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

________ were created by the SBA to provide loans under $35,000 that are normally shunned by banks.

A line of credit is a form of financing employed by sellers of big-ticket items such as cars,boats,and furniture,which the retailers pledge as collateral against the loan.

Making a public stock offering through the Small Company Offering Registration (SCOR)is easier and less expensive than a traditional public offering,with typical costs being less than half and only minimal notification to the SEC required.

Which of the following represents capital?

The owner of a small retail shop who needs to finance the purchase of display cases most likely would use which method of financing?

The average duration of an SBA loan is ________,while the mean loan amount is ________.

Which of the following is not a characteristic of a typical angel investor?

The CAPLine Program makes short-term capital loans to growing companies needed to finance seasonal buildups in inventory or accounts receivable.