Question 1 2 pts Debt Financing is a temporary supply of funding with a contract

Question

Question 1 2 pts Debt Financing is a temporary supply of funding with a contractual obligation to repay with interest: True False Question 2 2 pts Organic Funding is when a growing business relies on its own cash flow for day- to-day financial needs; to include overhead expenses True False Question 3 2 pts Investment Banks are the heart of the financial market, providing the greatest number and variety of loans to small businesses: True False Question4 2 pts One of the most Line of Credit, which is a short-term loan with a present limit that provides much- needed cash flow for day-to-day operations: common requests entrepreneurs make of banks is to establish a True

Explanation / Answer

1 False

Debt Financing - Four primary uses:

Acquisition, Construction, Development, Permanent Loan Financing

Referred to as the Senior Debt; it is the least risky layer & has the largest portion of the Capital Stack.

2. True

Organic Growth is through internal sources of funding; low risk, low cost, business cash flows

Can rely on business cash flows if the firm is profitable

3. False

It is not the investment banks but the Commercial Banks

Investment Banks - Segment of banking operations providing financial consultancy; help organizations raise capital; act as intermediaries between investors, and, security issuers

4. Line of Credit

True

Useful in case of repeated cash outlays; not intended to fund one-time purchases; makes specified amount available when an individual or firm needs it

Flexible loan from a bank or a financial institution; a specified amount of money; can be repaid immediately or over a period of time

5. False

Number of clicks / Number of times an ad is shown

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