GB 370 GENTRY EXAM 2 QUESTIONS
& ANSWERS(GRADED A+)
disadvantage of the classical decision making model is that it doesn't use -
ANSWERethics
capital - ANSWERmoney to start your business and buy things when you need it
if you ____ something you are basically __________ credit from the vendor -
ANSWERbuy, getting
lower interest rates make everything cheaper, because they fuel ____________ -
ANSWERinflation
in order to raise money from a new business, create a - ANSWER12 month budget plan
credit cards are _________ than other annual ________ lending - ANSWERcheaper,
equity
3 F's - ANSWERfriends, family, and fools; borrowing money from them is good but do
not let this give them the ability to meddle; get an LLC
Agree to terms - ANSWERto put a loan in motion, state how much you need, what you'll
use for it, and how you'll pay it back
specify before a loan - ANSWERif person will intend to put money in your business,
whether its secured, the covenants (restrictions) on the loan, outline legal agreements
of both parties, have all in writing
equity - ANSWERdont have to repay
venture capital - ANSWERcapital that takes risks in investing in a new business, what
you want but not easy to come by
how to get venture capital? - ANSWERapply to accelerator program
angel investors - ANSWERNOT motivated by profit, source of private capital, referring
to anyone who invests their money in an entrepreneurial company
angel investor characteristics - ANSWERmust have $1 million net worth, "accredited"
investor, liquid wealth of $250k, affiliated angels and nonaffiliated angels
affiliated angels - ANSWERsomeone who has contact w/ you or your business but not
necessarily related or acquainted w/ you
, examples- professionals, business associates, competitors, angel.co
nonaffiliated angels - ANSWERno connection to you or your business
examples) professionals, middle managers, entrepreneurs
remember these tips - ANSWER1. can't post your business plan online asking for
money
2. there are "exchanges" where you can solicit money and investors sign disclosures
3. allowing them to view your plan
debt - ANSWERreceiving money in form of a loan you have to repay
secured loan - ANSWERrequires kind of collateral (real estate or inventory) and has a
lower interest rate
ex) mortgages
unsecured loan - ANSWERmay occur if you are considered low risk. requires track
record of success
ex) credit card
line of credit loans - ANSWERuseful type of loan for the small business as it protects
the business from emergencies and stalled cash flow; for buying inventory and
operation costs, short term, most for 1 year and can be renewed
installment loans - ANSWERpaid back w/ equal monthly payments, these are covering
the principal and interest, receive full amount when contract is signed with interest
calculated to the final date of the loan
ex) home mortgage
balloon loans - ANSWERrequires only the interest to be paid before the final day of the
loan; small loan up front, own the principal/entire 3 years later, how most businesses
are financed
interim loans - ANSWERmake periodic payments to the contractors building new
facilities
4 C's of credit - ANSWER1. credit- examine personal credit history
2. character- if you spend money wisely
3. capacity- do you have money to keep business going during bad times
4. collateral- when seeking a secure loan, must put up collateral
collateral - ANSWERsecured payment of a loan
government helps loans keeping going by - ANSWERhas less requirements for owner's
equity and collateral than commercial loans
most of their funds given are smaller amounts that most banks are not willing to lend
& ANSWERS(GRADED A+)
disadvantage of the classical decision making model is that it doesn't use -
ANSWERethics
capital - ANSWERmoney to start your business and buy things when you need it
if you ____ something you are basically __________ credit from the vendor -
ANSWERbuy, getting
lower interest rates make everything cheaper, because they fuel ____________ -
ANSWERinflation
in order to raise money from a new business, create a - ANSWER12 month budget plan
credit cards are _________ than other annual ________ lending - ANSWERcheaper,
equity
3 F's - ANSWERfriends, family, and fools; borrowing money from them is good but do
not let this give them the ability to meddle; get an LLC
Agree to terms - ANSWERto put a loan in motion, state how much you need, what you'll
use for it, and how you'll pay it back
specify before a loan - ANSWERif person will intend to put money in your business,
whether its secured, the covenants (restrictions) on the loan, outline legal agreements
of both parties, have all in writing
equity - ANSWERdont have to repay
venture capital - ANSWERcapital that takes risks in investing in a new business, what
you want but not easy to come by
how to get venture capital? - ANSWERapply to accelerator program
angel investors - ANSWERNOT motivated by profit, source of private capital, referring
to anyone who invests their money in an entrepreneurial company
angel investor characteristics - ANSWERmust have $1 million net worth, "accredited"
investor, liquid wealth of $250k, affiliated angels and nonaffiliated angels
affiliated angels - ANSWERsomeone who has contact w/ you or your business but not
necessarily related or acquainted w/ you
, examples- professionals, business associates, competitors, angel.co
nonaffiliated angels - ANSWERno connection to you or your business
examples) professionals, middle managers, entrepreneurs
remember these tips - ANSWER1. can't post your business plan online asking for
money
2. there are "exchanges" where you can solicit money and investors sign disclosures
3. allowing them to view your plan
debt - ANSWERreceiving money in form of a loan you have to repay
secured loan - ANSWERrequires kind of collateral (real estate or inventory) and has a
lower interest rate
ex) mortgages
unsecured loan - ANSWERmay occur if you are considered low risk. requires track
record of success
ex) credit card
line of credit loans - ANSWERuseful type of loan for the small business as it protects
the business from emergencies and stalled cash flow; for buying inventory and
operation costs, short term, most for 1 year and can be renewed
installment loans - ANSWERpaid back w/ equal monthly payments, these are covering
the principal and interest, receive full amount when contract is signed with interest
calculated to the final date of the loan
ex) home mortgage
balloon loans - ANSWERrequires only the interest to be paid before the final day of the
loan; small loan up front, own the principal/entire 3 years later, how most businesses
are financed
interim loans - ANSWERmake periodic payments to the contractors building new
facilities
4 C's of credit - ANSWER1. credit- examine personal credit history
2. character- if you spend money wisely
3. capacity- do you have money to keep business going during bad times
4. collateral- when seeking a secure loan, must put up collateral
collateral - ANSWERsecured payment of a loan
government helps loans keeping going by - ANSWERhas less requirements for owner's
equity and collateral than commercial loans
most of their funds given are smaller amounts that most banks are not willing to lend
