Sources of Finance Quiz

What is a potential advantage of obtaining a loan from family or friends?

• It requires a lengthy application process.

• It may not need to be paid back.

• It guarantees business success.

• It always comes with high interest rates.

Which of the following is a disadvantage of applying for a grant?

• It requires giving up equity in the business.

• It needs to be paid back with interest.

• It is time-consuming to apply and complete paperwork.

• It is only available to public companies.

What is a disadvantage of crowd funding?

• It requires a large initial investment.

• A public request risks the project being copied by competitors.

• It guarantees reaching the targeted amount.

• It is a slow way to raise finance.

What is a potential disadvantage of obtaining a loan from family or friends?

• It always comes with high interest rates.

• Arguments may occur

• It guarantees business success.

• It requires a lengthy application process.

What is a disadvantage of venture capital?

• It does not require any return on investment.

• It is only available to government organizations.

• Venture capitalists may want a share of the business.

• It is only available for non-risky investments.

What is a condition for receiving a grant?

• The business needs to meet certain criteria.

• The business must be a public limited company.

• The business must be located in a rural area.

• The business must have no employees.

What is an advantage of a bank loan?

• There will be little or no interest
• You can pay in smaller installments
• They are quick and easy to arrange
• You don't have to pay it back

What is an advantage of an overdraft?

• There is never interest

• You can pay in smaller installments

• Useful for relatively small sums and short term finance

• You don't have to pay it back

What is an advantage of a business using owner's savings as a source of finance?

• Very low rate of interest

• It will bring new skills to the business

• It doesn't need repaying

• Repayment is always spread over a period time

What is an advantage of an overdraft?

• There is never interest
• You can pay in smaller installments
• They are quick and easy to arrange
• You don't have to pay it back