Understanding Business Financing Options

What is the term used when a business covers its costs by borrowing money?

• Crowdfunding

• Equity financing

• Debt financing

• Venture capital

Why might an entrepreneur need to borrow money to start a business?

• Because personal funds are insufficient

• To avoid using personal funds

• To increase the business's value

• To reduce business risks

In the example of Best Bicycle Delivery Service, how much additional money does the entrepreneur need?

• $200

• $50

• $100

• $150

What is the interest rate in the example loan for Best Bicycle Delivery Service?

• 7%

• 10%

• 5%

• 3%

How long does the entrepreneur have to repay the loan in the example?

• 6 months

• 5 years

• 1 year

• 2 years