Exam 11: Sources of Capital

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

A trust receipt is a:

Private offerings involve more time,expense,and paperwork than public offerings.

______ financing entails obtaining funds for the company in exchange for ownership.

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

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.

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

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

Under the SBA Microloan program,the entrepreneur can borrow up to:

________ financing does not require any collateral.

Under Rule 504 of Regulation D,a company can sell up to $1,000,000 of securities to any number of investors,regardless of their sophistication,in any 12-month period.

Rule 506 goes one step further than Rule 505 by allowing an issuing company to sell an unlimited number of securities to 35 investors and an unlimited number of accredited investors and relatives of issuers.

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

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

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.

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

All owners of ____ or more are required to personally guarantee an SBA loan.

Outside financing:

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

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