22-23 BM 2A Unit 7 Quiz

What are two types of financing available for entrepreneurs looking to secure initial capital for their business?

• Profit and loss

• Debt and equity

• Fixed and variable

• Managerial and accounting

Oliver is interested in selling shares of his company to raise additional capital. He knows some investors who might be interested. While no repayment would be required for this type of financing, what would be the biggest disadvantage that Oliver should understand before choosing this option?

• He would be required to pay interest even if the business did not make money.

• He might lose his seed money to his investors.

• He might need to put up some form of collateral as security.

• He could give up some ownership and control of his business.

Britney has investigated sources of funding for her new business and believes using debt financing will be her best option. Of the types of debt financing, which option may be the MOST accessible and demonstrate her

commitment to succeeding?

• Personal savings

• Line of credit

• Angel investors

• Banks or credit unions

When securing your first business loan, you should do all of the following EXCEPT:

• Find your credit score

• Prepare a business plan with financial projections

• Complete a loan application

• Take the first loan option to guarantee you can get a loan

Alden is exploring options for funding her business expansion. She is especially interested in securing funding with a pre-set borrowing limit that she can use any time she needs it. What type of funding does this BEST describe?

• Personal savings

• Line of credit

• Equity

• Debit card

Riley is sitting with her loan officer, reviewing the terms for repayment of her business loan. She noticed she may have to pledge something of value as a promise to repay. What term BEST describes this item of value?

• Negotiation

• Security

• Bond

• Collateral

Ricardo wants to start a gourmet lemonade stand. He will need lemons, cups, and sugar, along with materials for signs. To get the supplies he needs to start the business, he will need to secure some initial funds. What are the funds called that he will need to start his business?

• Capital money

• Debt financing

• Seed money

• Plant funding

The money needed in the business to pay for day-to-day operations is known as:

• long-term capital.

• working capital.

• seed money.

• debt financing.

Sagi and his business partner, Autumn, are prioritizing their long-term needs to help them estimate the necessary financing needed to move forward. What is one item they should include on their list?

• Setting up phone and Internet services

• Paying first and last month’s rent

• Establishing legal and accounting services

• Purchasing new equipment for future growth

Jericho is a successful personal trainer who is anticipating opening her own studio with a juice bar. She plans to hire fellow fitness enthusiasts who will agree to be filmed during workouts, so that she can also provide streaming options. As she determines the costs involved, what would be an example of a fixed cost?

• Rent

• Juice bar ingredients

• Exercise mats

• Wage-based hourly employees