Entrepreneurship Chapter 11 Q

Typically, debt financing requires:

• an asset as collateral.

• a degree of ownership in the firm.

• reduction of short-term assets.

• reduction of working capital.

________ financing does not require any collateral...

• Commercial bank loan

• Line of credit

• Equity

• Character loan

________ financing involves using any possible methods for conserving cash.

• Bootstrap

• SBIR

• Private placement

• Floor planning

Outside financing:

• usually takes between 15 days to three months to raise capital.

• increases the company's flexibility.

• increases the venture's impulse to spend.

• increases a firm's drive for sales and profits.

Equity partnerships, royalty partnerships, and joint ventures are used in the ________ stage of limited partnerships to reap the benefits of the effort.

• funding

• development

• exit

• All of the answers are correct.

In limited partnerships:

• the liability for any loss incurred is borne by the company.

• the sponsoring company acts as the general partner.

• there is no special tax benefit for partners.

• the sponsoring company does not retain rights to use any base technology to develop other products.

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

• 20 percent

• 25 percent

• 50 percent

• 100 percent

Which of the following is not one of the five Cs of lending?

• Caution

• Character

• Conditions

• Capacity

What type of cash flow financing loan can make funds available for up to 10 years?

• Character loans

• Real estate loans

• Long-term loans

• Installment loans

In a straight commercial loan funds are typically used for what time period?

• 30–90 days

• 180 days

• Up to one year

• Less than 30 days