Deck 18: Financial Management

Question 1

Bells'n'Whistles is a pinball refurbishing Company. Its founding partners need funding to buy inventory. Do they meet SBA criteria Why or why not

Answer 1

Small Business Administration (SBA) is an organization that which is established in vision of providing the financial assistance and support to the small businesses throughout the nation. As the new entrants of business would strive for their growth as successful entrepreneurs that require the capital for start-up and expansion purposes of business, the SBA stands as a support through providing loans for the business purposes. But however as per the policies of SBA some of the cause for which loans required are said to be ineligible. Hence the grant of loan for the business by SBA is dependent upon the cause and nature of the business.
Here in this instance as the loan is required for the "B and W" firm for the purchase of inventory for its refurbishing business. It is not eligible for the grant of the loan as per the policies of SBA for the grant of loans because of the reason that the nature of the business is refurbishing and the finance for the inventory of such kind business would be treated as investment. Hence the grant of loan is ineligible.

Question 2

Contact a lending officer at a local bank in your community, or visit the bank's website, to check the bank's policies on providing a business a line of credit and a revolving line of credit. Evaluate the chances that this bank will give a small business either form of short-term loan.

Answer 2

NO ANSWER

Question 3

Many small-business owners have a difficult time finding financing to start or expand their business. The Small Business Administration is one potential source of financing for many types of small businesses, but there are also some businesses that do not qualify for SBA loans. Go to www.sba.gov/content/ businesses-eligible-ineligible-sba-assistance and see whether the following businesses are eligible to apply for SBA financing:
Lettuce Entertain U is a company needing funding to remodel an old warehouse to house its latest vegan restaurant. Does it meet SBA criteria Why or why not

Answer 3

SBA which otherwise in full known as Small Business Administration is an organization that is established with a vision of providing the financial assistance and support to the small businesses throughout the nation. As the new entrants of businesses would endeavor for their growth as successful entrepreneurs that require the capital for start-up and expansion purposes of business, the SBA stands as a supporting wheel through providing loans for the business purposes. But however as per the policies of SBA some of the cause for which loans required are said to be ineligible. Hence the grant of loan for the business by SBA is dependent upon the cause and nature of the business.
Here in this instance as the loan is required for the "L and E" company for the renovation or remodeling of the house that which is kept idle into the restaurant which could render service. It is eligible for the grant of the loan as per the policies of SBA because of the reason that the requirement comes under the category of an eligible passive company.

Question 4

Factoring accounts receivable is a form of financing used since the days of Babylonian King Hammurabi 4,000 years ago. Today it's still a source of short-term funds used by small businesses. Visit www.21stfinancialsolutions. com to get more in-depth information about factoring and be prepared to discuss the pros and cons of factoring to the class.

Question 5

What are the primary sources of short-term funds for new business owners What are their major sources of long-term funds

Question 6

Go to your college's website and see whether its operating budget is online. If not, go to the campus library and see whether the reference librarian has a copy of your college's operating budget for the current year. Try to identify major capital expenditures your college has planned for the future.

Question 7

Many small-business owners have a difficult time finding financing to start or expand their business. The Small Business Administration is one potential source of financing for many types of small businesses, but there are also some businesses that do not qualify for SBA loans. Go to www.sba.gov/content/ businesses-eligible-ineligible-sba-assistance and see whether the following businesses are eligible to apply for SBA financing:
Growing Like a Weed is a lawn care business that needs funding to buy additional equipment in order to expand. Does it meet SBA criteria Why or why not

Question 8

Why does a finance manager need to understand accounting information if the firm has a trained accountant on its staff

Question 9

One of the most difficult concepts to get across to small-business owners is the need to take all the trade credit they can get. For example, the credit terms 2/10, net 30 can save businesses money if they pay their bills in the first 10 days. Work with a group of classmates to build a convincing financial argument for using trade credit.

Question 10

Many small-business owners have a difficult time finding financing to start or expand their business. The Small Business Administration is one potential source of financing for many types of small businesses, but there are also some businesses that do not qualify for SBA loans. Go to www.sba.gov/content/ businesses-eligible-ineligible-sba-assistance and see whether the following businesses are eligible to apply for SBA financing:
Glamour Galore is a cosmetic company that pays sales commissions based on a system that depends upon salespeople recruiting additional salespeople. It needs funding to build a marketing campaign. Does it meet SBA criteria Why or why not

Question 11

Why do firms generally prefer to borrow funds to obtain long-term financing rather than issue shares of stock

Question 12

Go online and check the capitalization required to open a franchise of your choice, like Subway or McDonald's. Does the franchisor offer financial assistance to prospective franchisees Evaluate the cost of the franchise versus its business potential using the risk/return trade-off discussed in the chapter.