An entrepreneur needs office equipment for the new business. In order to raise the money to buy the equipment,the entrepreneur takes a loan and pledges the equipment as collateral for the loan. This type of financing is known as

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The type of financing described is asset-based financing, as the entrepreneur is using the equipment as collateral for the loan. Equity-based financing involves selling a portion of ownership in the business in exchange for funding. Covenant-based financing involves setting certain financial or performance targets that must be met for the loan to be maintained. Social-based financing involves funding from socially responsible investors, and cost of capital-based financing involves evaluating the cost of various sources of funding to determine which is most cost-effective for the business.

An Entrepreneur Needs Office Equipment for the New Business