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Exam 11: Sources of Capital

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Question 21

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When new equipment is being purchased or presently owned equipment is used as collateral,usually 50 to 80 percent of the value of the equipment can be financed depending on its salability.

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Question 22

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The personal funds of the entrepreneur are the most expensive.

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Question 23

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When borrowing from friends and family,the entrepreneur should avoid putting agreements in writing to avoid future disagreements.

About 90 percent of the value of finished goods inventory can be used as collateral for a commercial bank loan.

 The costs of establishing R&D limited partnerships are greater than conventional financing.

Banks will lend a company up to 50 percent of their accounts receivable value.

When using private placement funding the entrepreneur must disclose all information as accurately as possible.

During Phase II of an SBIR grant up to ________ can be awarded.

Under the ________ program,federal agencies with budgets over $1 billion are required to set aside 0.3 percent for small businesses.

Identify and explain the three types of loans used for cash flow financing.

The Small Business 7(a) Guaranty program:

Which of the following is not an example of internal financing

Equity partnerships,royalty partnerships,and joint ventures are used in the ________ stage of limited partnerships to reap the benefits of the effort.

Bootstrap financing involves using any possible method,such as discounts for volume purchasing,to conserve cash.

All owners,regardless of percentage of ownership,are required to personally guarantee SBA loans.

Which of the following is not true about the costs and benefits of R&D limited partnerships

Under Rule 504 of Regulation D,a company can sell up to $1,000,000 of securities to any number of investors,regardless of their sophistication,in any 12-month period.

Mortgage financing is another term for:

The five Cs of credit are character,capacity,collateral,capital,and competence.

 Equity financing requires collateral.