Exam 11: Sources of Capital

The SBA's Microloan program provides short-term loans of up to $100,000 to small businesses for working capital or purchase of inventory.

When a bank grants a line of credit,a "commitment fee" is assessed at the start of the loan.

A "commitment fee" is used in arranging for a:

Explain the three major components of an R&D partnership.

Trust receipts are inventory loans used to finance floor plans of retailers such as automobile dealers.

About 90 percent of the value of finished goods inventory can be used as collateral for a commercial bank loan.

When using private placement funding the entrepreneur must disclose all information as accurately as possible.

Mortgage financing is another term for:

The most popular means of obtaining capital is from friends and family.

__________ financing involves using any possible methods for conserving cash.

All owners,regardless of percentage of ownership,are required to personally guarantee SBA loans.

When the bank advances a large percentage of the invoice price of goods and is paid on a pro-rata basis when inventory is sold this is called:

The SBA's Microloan program is their primary business loan program.

In limited partnerships:

A short-term,internal source of funds can be obtained by reducing short-term assets such as inventory,cash,and other working-capital items.

In an R&D limited partnership the liability for losses incurred is borne by the limited partners.

Under the ____________ program,federal agencies with budgets over $1 billion are required to set aside 0.3 percent for small businesses.

Which of the following is not true about the costs and benefits of R&D limited partnerships?

An entrepreneur contributing his or her own capital would be an example of internally generated funds.

Which of the following is not one of the five C's of lending?