Exam 11: Sources of Capital

Give examples of internal and external sources of funding. profits sale of assets reduction in working capital extended payment terms accounts receivable Entrepreneur's investment Loans/equity from family and friends commercial bank loans private investors (angels) R&D limited partnerships government loan programs and grants venture capital private placement/private offering

Long-term loans from commercial banks are usually readily available to small startup firms.

Which of the following is not an example of internal financing?

Extending payments to suppliers is an example of generating funds internally.

The type of funds most frequently used by businesses is externally generated funds.

Small Business Innovation Research grants are funded by federal agencies which provide a portion of their R&D funds to small businesses.

Bootstrap financing decreases the company's flexibility and drive for sales.

Which of the following types of credit does not require the pledging of an individual's collateral or a cosigner?

The sponsoring company in a R&D limited partnership is the limited partner.

Accredited investors are:

Funds obtained from ____ are the least expensive in terms of cost and control.

The asset base for loans usually is accounts receivable,inventory,equipment,and real estate.

________ financing does not require any collateral.