ESB 4.2

Which 2 should be included when calculating start up cost for a business?

• Rent

• Utilities

• Business cards

• Permits, licenses, and incorporation fees

• Payroll

Which 2 are benefits of equity funding?

• Can be used to raise working capital.

• Loan payments are predictable; they do not change with the fortunes of the business.

• Investors do not get paid if the business does not make a profit.

• Investors have no say in the management or direction of the business.

• Loan payments can be set up so they match seasonal sales of the business.

Which 2 are benefits of using Angel investors to help start a business?

• Payback of the loan is predictable.

• Angels often accept a lower return on investment compared to other sources of equity capital.

• Angel investors typically do not expect to be paid until the business begins making money.

• Angels have no say in the management of the business.

• No need for collateral

Equity financing requires a business owner to give up control of the business to obtain funding

• True

• False

Bootstrapping requires the owner of the company to provide all the funding.

• True

• False

Lenders do not require owners to identify the purpose of the loan

• True

• False

The business owner's personal credit score does not affect their ability to qualify for a loan.

• True

• False