Exam 15: Obtaining Debt Capital

A(n)_____ is a loan specifying the maximum amount a bank will allow the borrower for a one-year period.

According to Babson College Adjunct Professor Leslie Charm,what should an entrepreneur look for when seeking to develop a constructive banking relationship?

Factoring is a cheap method for turning receivables into cash.

_____ is any machinery,equipment,or business property that is made the collateral of a loan.

Identify a characteristic of factoring as a form of accounts receivable financing.

Term loans are also a substitute for a series of short-term loans made with the hope of renewal by the borrower.

In time-sales finance,what do dealers do when they cannot themselves finance installments or conditional sales contracts on a purchased equipment?

Plant improvement loans are secured only by a second mortgage on the part of the property that is being improved.

To keep trade credit open,the full balance must be periodically paid off.

Finance companies have reasonable prepayment penalties.

With regard to personal guarantees,what is meant by "joint and severable?"

For an established and financially sound company,interest rates are frequently quoted using a(n)_____ with an added premium.

What kind of leases does not appear in the balanace sheet?

Following the restructuring of debt in a turnaround situation,forgiven debt becomes _____ for the entrepreneur who owns the company and who has personally had to guarantee the loans.

Holding zero cash balances can prove extremely beneficial for closely held companies in the long run.

Banks generally have close ties to venture capital firms and will refer entrepreneurs to such firms for possible _____.

In a standard factoring arrangement,the factor buys the client's receivables outright,without _____,as soon as the client creates them by shipment of goods to customers.