Business Foundations Chapter 6 Test Review

A person who assumes the risk of starting a new business is a

• private investor

• entrepreneur

• "angel"

• venture capitalist

Money used to expand a business comes out of ____.

• start-up costs

• operating costs

• cash flow`

• reserve funds

What is the highest percentage of market value a home equity loan will provide?

• 80%

• 60%

• 50%

• 20%

A home equity loan is an example of ___.

• insider financing

• bank funding

• an unsecured loan

• personal financing

For unexpected costs, businesses often use ____.

• insider financing

• a line of credit

• a long-term commercial loan

• a home equity loan

Comments from creditors are helpful to a bank when assessing a would-be borrower's ____.

• capacity

• capital

• character

• collateral

Less paperwork and shorter response time are the advantages of applying for a loan through the ____.

• Angel Capital Electronic Network

• Small Business Investment Companies

• Fortune 500 companies

• Low Documentation Program

A disadvantage of funding a business with business credit cards is ____.

• high interest rates

• extensive paperwork

• a need for collateral

• the long wait for a reply

Which source of funding expects to have a major voice in a business's decisions?

• a bank

• a commercial financing company

• a venture capital firm

• a local government

Which of the five C's of credit refers to your business's ability to repay the loan on time?

• character

• capacity

• capital

• collateral