Chapter 4: Long Term and Short term funds

A type of borrowing that allows the cardholder to borrow funds from the credit card issuer up to a certain limit.

• Credit Cards

• Lending Companies

• Pawnshops

• Credit Cooperatives

Financial institutions that provide several loan products catering to different types of needs.

• Credit Cards

• Informal lending

• Banks

• Pawnshops

Borrowing money from lenders and not giving up ownership

• Bank financing

• Debt financing

• Equity financing

• Non-Current financing

All of the following are short term sources of funds EXCEPT;

• Suppliers Credit

• Equity investors

• Pawnshops

• Credit Cards

All of the following are examples of long term source of funds EXCEPT;

• Issuance of Common Stock

• 6 year housing loan

• Acquisition of Equipment

• Salary Loan

Read the instructions carefully.Write TRUE if the statement is false and write FALSE if the statement is true.

Lenders evaluate capital to determine if the borrower has enough resources to cover the loan amount in case of default.

• TRUE

• FALSE

Read the instructions carefully.Write TRUE if the statement is false and write FALSE if the statement is true.

Lenders evaluate condition by looking at the latest news articles relating to the borrower's company (if listed), trends in the financial statements, and the business background/company profile.

• FALSE

• TRUE

Read the instructions carefully.Write TRUE if the statement is false and write FALSE if the statement is true.

Collateral is an important factor that lenders consider when approving a loan. It refers to the borrower's reputation, honesty, and stability.

• FALSE

• TRUE

Read the instructions carefully.Write TRUE if the statement is false and write FALSE if the statement is true.

If the borrower fails to repay the loan, the lender can seize the collateral to recover their losses.

• TRUE

• FALSE

Read the instructions carefully.Write TRUE if the statement is false and write FALSE if the statement is true.

Banks provide funds in exchange for collateral, usually jewelry or other items that are of value.

• TRUE

• FALSE