Business Credit and Business Growth

What is the primary benefit of establishing strong business credit?

• The business never has to repay loans

• The business can secure better loan terms and higher credit limits

• It eliminates the need for financial planning

• It allows businesses to mix personal and business expenses

Which factor affects a business credit score the most?

• Number of employees

• How quickly invoices are sent to customers

• On-time payments and credit utilization

• How much profit the business makes

Why might a business choose a line of credit over a traditional loan?

• A line of credit provides flexible access to funds only when needed

• A line of credit has no repayment requirements

• Traditional loans require a perfect credit score

• A line of credit comes with no interest charges

What is an advantage of business loans compared to using business credit cards for large purchases?

• Loans have lower interest rates than credit cards

• Loans never require repayment

• Credit cards have unlimited spending limits

• Business loans improve personal credit

A company needs short-term funding to cover cash flow gaps while waiting for customer payments. Which financing option should they consider?

• Venture capital funding

• Invoice financing

• Crowdfunding

• Equipment leasing

What is a key risk of using business credit?

• Business credit never impacts loan approvals

• Missing payments can lower credit scores and limit future borrowing

• Business credit does not impact interest rates

• Businesses are required to use all available credit

A business owner is considering applying for a loan to expand. What is one key factor lenders will evaluate?

• How many hours the owner works per week

• The business’s revenue and ability to repay the loan

• The business’s social media presence

• The number of employees on payroll

Which of the following financing options involves selling ownership in a company in exchange for investment?

• Term loan

• Angel investors

• Business credit card

• Line of credit

Which of the following best describes scalability in a business?

• The ability to grow revenue while keeping costs manageable

• Expanding by hiring as many employees as possible

• A business growing too fast to handle demand

• A business expanding without a clear financial plan

Why do entrepreneurs seek venture capital funding?

• To borrow money without repaying it

• To receive large investments to fund business growth

• To avoid financial planning

• To take complete control over the business