Borealis Computing is a small start-up firm that needs to purchase essential equipment and supplies to begin operations.Gencent LLC, a larger firm, offers to finance Borealis Computing's purchases.Under their agreement, Borealis Computing will repay Gencent LLC overtime at a specified interest rate.In the context of non-equity funding, Gencent LLC's financing of Borealis Computing's purchases is an example of ________.

Question

Quizplus · Accepted Answer

Gencent LLC providing financing for Borealis Computing's equipment and supplies is an example of supplier credit, which is a form of non-equity financing where a supplier extends credit to a buyer to purchase goods or services. Crowdfunding involves raising small amounts of money from a large number of people, equity investment involves selling ownership in a company in exchange for funding, and factoring involves selling accounts receivable to a third-party for immediate cash.

Borealis Computing Is a Small Start-Up Firm That Needs to Purchase