Question 1

Installment loans are typically given for a period of 30-40 days.

Accepted Answer

A) True 
 B)False

Question 2

Outside financing:

Accepted Answer

A) usually takes between 15 days to three months to raise capital. 
B) increases the company's flexibility. 
C) increases the venture's impulse to spend. 
D) increases a firm's drive for sales and profits. 
A) usually takes between 15 days to three months to raise capital. 
B) increases the company's flexibility. 
C) increases the venture's impulse to spend. 
D) increases a firm's drive for sales and profits.

Question 3

Which of the following statement is(are)true?

Accepted Answer

A) Rule 505 permits the sale of $10 million of unregistered securities in the private offering in any 12-month period. 
B) Rule 504 and 505 permit no general advertising or solicitation through public media. 
C) Rule 506 provides the first exemption to a company seeking to raise a small amount of capital from numerous investors. 
D) The entrepreneur issuing the private offering is spared the burden of proving that the exemptions granted have been met. 
A) Rule 505 permits the sale of $10 million of unregistered securities in the private offering in any 12-month period. 
B) Rule 504 and 505 permit no general advertising or solicitation through public media. 
C) Rule 506 provides the first exemption to a company seeking to raise a small amount of capital from numerous investors. 
D) The entrepreneur issuing the private offering is spared the burden of proving that the exemptions granted have been met.

Question 4

When a company receives an SBIR grant,any patent rights and software generated belong to:

Accepted Answer

A) the Federal Government. 
B) the bank securing the loan. 
C) the Small Business Administration. 
D) the entrepreneur. 
A) the Federal Government. 
B) the bank securing the loan. 
C) the Small Business Administration. 
D) the entrepreneur.

Question 5

Outside capital should be sought only after all possible internal sources of funds have been explored.

Accepted Answer

A) True 
 B)False

Question 6

The SBA's 7(a)Loan Guarantee program helps qualified small businesses obtain financing when they can't get a business loan through regular lending channels.

Accepted Answer

A) True 
 B)False

Question 7

In which phase of the SBIR grant process are funds used to create a prototype of a product or service?

Accepted Answer

A) Phase I 
B) Phase II 
C) Phase III 
D) Phase IV 
A) Phase I 
B) Phase II 
C) Phase III 
D) Phase IV

Question 8

Debt financing requires the entrepreneur to repay the amount borrowed plus interest.

Accepted Answer

A) True 
 B)False

Question 9

Explain and define the four types of asset backed loans.
A.Accounts Receivable - using A/R as collateral a bank may finance up to 80% of accounts receivable balance,can be factored (bank incurs risk of collection therefore more expensive)or unfactored (entrepreneur incurs risk of collection.
B.Inventory - Inventory is used as collateral.Usually,the finished goods inventory can be financed for up to 50 percent of its value.Trust receipts are a unique type of inventory loan used to finance floor plans of retailers,such as automobile and appliance dealers.In trust receipts,the bank advances a large percentage of the invoice price of the goods and is paid on a pro rata basis as the inventory is sold.
C.Equipment - Equipment can be used to secure longer-term financing,usually on a 3- to 10-year basis.When new equipment is being purchased or presently owned equipment is used as collateral,usually 50 to 80 percent of the value of the equipment can be financed depending on its salability.In the sale-leaseback arrangement,the entrepreneur "sells" the equipment to a lender and then leases it back for the life of the equipment to ensure its continued use.
D.Real estate - This mortgage financing is usually easily obtained to finance a company's land,plant,or another building,often up to 75 percent of its value.

Accepted Answer

A.Accounts Receivable - using A/R as col

Question 10

The Small Business 7(a)Guaranty program:

Accepted Answer

A) guarantees up to 50 percent of the amount loaned. 
B) helps qualified small businesses obtain financing when they cannot obtain it through regular lending channels. 
C) has a maximum loan amount of $10 million. 
D) loans can be used only for machinery and equipment,and land and building. 
A) guarantees up to 50 percent of the amount loaned. 
B) helps qualified small businesses obtain financing when they cannot obtain it through regular lending channels. 
C) has a maximum loan amount of $10 million. 
D) loans can be used only for machinery and equipment,and land and building.

Question 11

All ventures have some equity.

Accepted Answer

A) True 
 B)False

Question 12

A trust receipt is a:

Accepted Answer

A) type of accounts payable loan. 
B) type of real estate loan. 
C) type of inventory loan. 
D) type of cash flow financing loan. 
A) type of accounts payable loan. 
B) type of real estate loan. 
C) type of inventory loan. 
D) type of cash flow financing loan.

Question 13

During Phase II of an SBIR grant up to _______ can be awarded.

Accepted Answer

A) $100,000 
B) $500,000 
C) $750,000 
D) $1,000,000 
A) $100,000 
B) $500,000 
C) $750,000 
D) $1,000,000

Question 14

Regulation D regulates private placements.

Accepted Answer

A) True 
 B)False

Question 15

A bank may finance up to ______ of a company's accounts receivable.

Accepted Answer

A) 50% 
B) 60% 
C) 70% 
D) 80% 
A) 50% 
B) 60% 
C) 70% 
D) 80%

Question 16

If the amount of money provided by family members or friends is small and in the form of equity financing,they do not have an ownership position in the venture.

Accepted Answer

A) True 
 B)False

Question 17

SBA guaranteed loans are guaranteed for 100 percent of the loan amount.

Accepted Answer

A) True 
 B)False

Question 18

Any patent rights on technology developed in SBIR grants are the property of the federal government.

Accepted Answer

A) True 
 B)False

Question 19

The costs of establishing R&D limited partnerships are greater than conventional financing.

Accepted Answer

A) True 
 B)False

Question 20

Identify and explain the four types of loans used for cash flow financing.
A.Installment loans - Installment loans can be obtained by a venture with a track record of sales and profits.These short-term funds are frequently used to cover working capital needs for a period of time,such as when seasonal financing is needed.These loans are usually for 30 to 40 days.
B.Straight commercial loans - A hybrid of the installment loan is the straight commercial loan,by which funds are advanced to the company for 30 to 90 days.These self-liquidating loans are frequently used for seasonal financing and for building up inventories.
C.Long-term loans - When a longer time period for use of the money is required,long-term loans are used.These loans (usually available only to strong,mature companies)can make funds available for up to 10 years.The debt incurred is usually repaid according to a fixed interest and principal schedule.The principal,however,can sometimes start being repaid in the second or third year of the loan,with only interest paid the first year.
D.Character loans - When the business itself does not have the assets to support a loan,the entrepreneur may need a character (personal)loan.These loans frequently must have the assets of the entrepreneur or other individual pledged as collateral or the loan cosigned by another individual.Assets that are frequently pledged include cars,homes,land,and securities.

Accepted Answer

The four types of loans used for cash fl

Installment loans are typically given for a period of 30-40 days.

Outside financing:

Which of the following statement is(are)true?

When a company receives an SBIR grant,any patent rights and software generated belong to:

Outside capital should be sought only after all possible internal sources of funds have been explored.

The SBA's 7(a)Loan Guarantee program helps qualified small businesses obtain financing when they can't get a business loan through regular lending channels.

In which phase of the SBIR grant process are funds used to create a prototype of a product or service?

Debt financing requires the entrepreneur to repay the amount borrowed plus interest.

The Small Business 7(a)Guaranty program:

All ventures have some equity.

A trust receipt is a:

During Phase II of an SBIR grant up to _______ can be awarded.

Regulation D regulates private placements.

A bank may finance up to ______ of a company's accounts receivable.

If the amount of money provided by family members or friends is small and in the form of equity financing,they do not have an ownership position in the venture.

SBA guaranteed loans are guaranteed for 100 percent of the loan amount.

Any patent rights on technology developed in SBIR grants are the property of the federal government.

The costs of establishing R&D limited partnerships are greater than conventional financing.

Entrepreneurship and the Entrepreneurial Mind-Set

Entrepreneurial Intentions and Corporate Entrepreneurship

Entrepreneurial Strategy: Generating and Exploiting New Entries

Creativity and the Business Idea

Identifying and Analyzing Domestic and International Opportunities

Intellectual Property and Other Legal Issues for the Entrepreneur

The Business Plan: Creating and Starting the Venture

The Marketing Plan

The Organizational Plan

The Financial Plan

Informal Risk Capital, Venture Capital, and Going Public

Strategies for Growth and Managing the Implication of Growth

Accessing Resources for Growth From External Sources

Succession Planning and Strategies for Harvesting and Ending the Venture

Filters

Exam 11: Sources of Capital

Installment loans are typically given for a period of 30-40 days.

Outside financing:

Which of the following statement is(are)true?

When a company receives an SBIR grant,any patent rights and software generated belong to:

Outside capital should be sought only after all possible internal sources of funds have been explored.

The SBA's 7(a)Loan Guarantee program helps qualified small businesses obtain financing when they can't get a business loan through regular lending channels.

In which phase of the SBIR grant process are funds used to create a prototype of a product or service?

Debt financing requires the entrepreneur to repay the amount borrowed plus interest.

The Small Business 7(a)Guaranty program:

All ventures have some equity.

A trust receipt is a:

During Phase II of an SBIR grant up to _______ can be awarded.

Regulation D regulates private placements.

A bank may finance up to ______ of a company's accounts receivable.

If the amount of money provided by family members or friends is small and in the form of equity financing,they do not have an ownership position in the venture.

SBA guaranteed loans are guaranteed for 100 percent of the loan amount.

Any patent rights on technology developed in SBIR grants are the property of the federal government.

The costs of establishing R&D limited partnerships are greater than conventional financing.

Entrepreneurship and the Entrepreneurial Mind-Set

Entrepreneurial Intentions and Corporate Entrepreneurship

Entrepreneurial Strategy: Generating and Exploiting New Entries

Creativity and the Business Idea

Identifying and Analyzing Domestic and International Opportunities

Intellectual Property and Other Legal Issues for the Entrepreneur

The Business Plan: Creating and Starting the Venture

The Marketing Plan

The Organizational Plan

The Financial Plan

Informal Risk Capital, Venture Capital, and Going Public

Strategies for Growth and Managing the Implication of Growth

Accessing Resources for Growth From External Sources

Succession Planning and Strategies for Harvesting and Ending the Venture

Filters