BA109 Quiz 13 Latest 2023 with complete solution
The U.S. Department of Agriculture's Rural Business Co-op Service provides financial assistance to businesses that create nonfarm employment opportunities in rural areas.
True
The largest single source of external equity capital for small busine...
BA109 Quiz 13 Latest 2023 with complete solution
The U.S. Department of Agriculture's Rural Business Co-op Service provides
financial assistance to businesses that create nonfarm employment opportunities
in rural areas.
True
The largest single source of external equity capital for small businesses is:
angels.
Rather than piecing together their startup capital from multiple sources as they
have in the past, entrepreneurs now are relying on a single source of funding.
False
Asset-based loans are an expensive method of financing because of the cost of
originating and maintaining them and the higher risk involved.
True
Not only must a company meet SEC requirements for a public offering, but it also
must meet securities laws in all states in which the issue is sold.
True
In startup companies, raising capital can easily consume as much as one-half of
the entrepreneur's time and take many months to complete.
True
Entrepreneurs needing between $100,000 and $3 million in the current financial
environment will likely find acquiring financing to be:
challenging.
If banks refuse to lend money to a startup business, the owner usually cannot
convince his or her vendors and suppliers to extend trade credit either.
False
In discounted accounts receivable financing, a small business can typically
borrow an amount equal to ________ percent of its receivables it pledges as
collateral.
55 - 85
The majority of the loans a commercial finance company makes are unsecured by
collateral.
False
Savings and loan associations typically specialize in loans for:
real property.
The goal of the SEC's Regulation S-B and S-K is:
to open the doors to capital markets to smaller companies by cutting the paperwork and
the costs normally required to make a public offering.
Angels are not a good source of financing for entrepreneurs seeking relatively
small amounts of money, as they typically do not make investments of less than
$1 million.
False
An option for acquiring equity capital is for the entrepreneur to take on partner(s);
however, it is important that he consider the impact of giving up some personal
control over operations and of sharing profits with others.
True
, SBIC financing would be attractive to an entrepreneur whose primary concern is
maintaining majority ownership in her business, as SBICs are prohibited from
obtaining a controlling interest in the companies in which they invest.
True
Two factors that make a deal attractive to venture capitalists include high returns
and a convenient and profitable exit strategy.
True
SBICs provide financing to small businesses that are at least 51 percent owned
by minorities, or socially or economically disadvantaged people.
True
If the value of the borrower's collateral drops, a stockbroker can make a
________, requiring the borrower to provide more collateral for his margin loan.
margin call
A ________ is a hybrid between a conventional loan and a bond; at its heart it is a
bond, but its terms are tailored to the borrower's individual needs, as a loan
would be.
private placement
Lending practices at credit unions are very much like those at banks, but credit
unions usually are willing to make smaller loans and will loan only to their
members.
True
The most common form of secured credit is accounts receivable financing in
which businesses can usually borrow an amount equal to 55-80 percent of its
receivables.
True
The Economic Development Administration offers loan guarantees to create new
businesses in economically depressed areas with below-average incomes and
high unemployment rates.
True
The Community Advantage Loan Program provides loans to communities that
have suffered a natural disaster.
True
Banks tend to be very conservative in their lending practices and prefer to make
loans to established small businesses rather than to high-risk business start-ups.
True
Bank loans, retained earnings and credit cards are the most popular sources of
small business financing.
True
Only about half of the companies that attempt a public stock offering ever
complete the process.
False
In inventory financing, a small business can typically borrow an amount equal to
________ percent of the inventory it pledges as collateral.
no more than 50
Which of the following represents capital?
All of these
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