Question 1

Match the term with its definition.
a.Balloon payment
b.Business angels
c.Chattel mortgage
d.Crowdfunding
e.Factoring
f.Initial public offering
g.Loan covenants
h.Private placement
i.Real estate mortgage
j.Venture capitalist
-What are the trade-offs between profitability, risk and control that should be considered when choosing between debt and equity?

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a.Balloon payment
b.Business...

Question 2

Discuss reasons a business would lease as opposed to purchasing equipment.

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Question 3

Luke has a new company and is considering equity financing.Currently, Luke is the only owner and source of equity for the business and makes all executive decisions for daily operations.What effect could the addition of other investors have?

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Question 4

Frankie is looking for sources of financing for his new tour company.At this time, he would like to keep his financing close to home but eventually apply for bank financing.What are Frankie's financial support options?

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Question 5

List the "5 Cs of Credit" and explain their impact on borrowing ability.

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Question 6

Gina owns a clothing resale store in a low-income neighbourhood.Since opening, the store has hired five employees and is making a small profit.The store is the only business in her area and often sponsors fundraisers at the location.Since the store is in need of expansion capital, what type of funding should Gina do and why?

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Question 7

Sarie loves to cook and go backpacking, and she had an idea for a backpacking cookbook that would combine ultra-light ingredients into interesting and appetising meals.However, she needs the money to research and test the recipes as well as for cover printing and marketing expenses.How could Sarie use the different crowdfunding options, donations, rewards' options and pre-purchase or equity-based options to finance her cookbook?

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Question 8

Discuss two methods of selling shares.

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Question 9

Discuss suggestions for an entrepreneur who is considering asking family or friends for financing.

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Question 10

Alice is starting a purse business and has been approached by Renee, a business angel, about investing in the company.Discuss items Alice should consider before going into business with Renee.

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Question 11

Discuss business traits that business angels look for in prospective investments.What are typical motivations?

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Question 12

Violet's Catering is growing rapidly.A new customer has requested the company cater a retirement luncheon for 500 persons resulting in Violet's Catering needing a large order from the company's primary food vendor.Although the company is experiencing growth, cash flow is a concern.What would be the best financing option?

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Quiz 12: A Firms Sources of Financing