Bank debt is not a realistic source of financing for startups due to all of the following reasons except :
A)payables either do not yet exist or the startup's history is inadequate
B)a large portion of the assets are intangible and provide no collateral
C)the startup's dependence on a small number of irreplaceable people is not a good match to demand deposits or other bank liabilities
D)the startup's receivables collection track record is incomplete

Question

Quizplus · Accepted Answer

The other three options listed (B, C, and D) all accurately describe why bank debt may not be a realistic source of financing for startups. Intangible assets cannot be used as collateral, and a startup that depends heavily on a few individuals is not a good match for the kinds of bank liabilities that a more established company might have. Additionally, incomplete or nonexistent receivables collection can make it difficult for a startup to secure financing through a bank. However, payables not existing or an inadequate history are not necessarily reasons why bank debt would not be a realistic source of financing for a startup.

Bank Debt Is Not a Realistic Source of Financing for Startups