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Exam 12: Other Financing Alternatives

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Question 31

Multiple Choice

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Which of the following is not a Small Business Administration program?

A) loan guaranty programs
B) certified and preferred lender programs
C) low documentation loan programs
D) energy and conservation loan programs
E) certified financial planner funding programs

F) All of the above
G) B) and C)

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Question 32

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When assessing the creditworthiness of new entrepreneurs,lending institutions review the "Five C's".The focus on the intended purpose of the loan is known as:

A) capacity
B) capital
C) collateral
D) conditions
E) character

F) C) and D)
G) A) and C)

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Question 33

Multiple Choice

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In which of the following credit programs does the SBA approve and guarantee a not-for-profit Certified Development Company's portion of the debt?

Selling receivables to a third party at a discount from their face value is referred to as:

In a factoring arrangement,the third party makes its money by purchasing the receivables at a discount from the total amount due on the receivables.

The SBA approves the standard 7(a)loan and guarantees up to 85% of the loan value.

By an act of Congress,the Small Business Administration (SBA)was created for the purpose of fostering the initiation and growth of small businesses.

Unlike traditional commercial banks,venture banks typically provide debt to start-ups that have already received equity financing from professional venture capital firms.

Commercial loan officers have the expertise to project new venture's business successes,and thus are as willing to make funds available to entrepreneurs on the same basis as other businesses.

Microloans in the SBA credit program are made by not-for-profit or government-affiliated Community Development Financial Institutions (CDFIs).

Factoring is the selling of receivables to a third party at a discount from their face value.

Small Business Investment Companies (SBICs) are lenders in which of the following SBA credit programs?

Bank debt is not a realistic source of financing for start-ups due to all of the following reasons except?

All of the following are common loan restrictions except?

SBA 7(a)loans are made usually for 1 to 3 years in amounts up to $5,000,000,require collateral,and can be used for most business purposes.

The use of receivables as collateral for a loan is known as:

Factoring is the sale of payables to a third party at a discount to their face value.

Commercial banks receive a portion of their returns from warrants in addition to the receipt of interest and the repayment of the principal that was lent.

Concerning factoring,all of the following are true except: