As a rough rule, a start-up may be able to obtain debt for working capital purposes that is equal to its equity and subordinated debt.

Question

Quizplus · Accepted Answer

This statement is generally true as lenders often consider the equity and subordinated debt as a cushion that reduces their risk, allowing them to provide debt up to the amount of equity and subordinated debt. However, this can vary based on the lender's assessment of the start-up's risk and financial health.

As a Rough Rule, a Start-Up May Be Able to Obtain