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Questions and Answers
What is the main characteristic of debt financing?
What is the main characteristic of debt financing?
- Involves payback of funds plus a fee for the use of money (correct)
- Involves receiving funds without any cost
- Involves sharing ownership of the venture
- Does not require repayment of funds
What is the typical duration of short-term borrowing?
What is the typical duration of short-term borrowing?
- Two to three years
- Five years or more
- One year or less (correct)
- Depends on the lender's preference
What is a common question asked by commercial banks when considering a loan application?
What is a common question asked by commercial banks when considering a loan application?
- How many competitors do you have
- What is your favorite business model
- What do you plan to do with the money (correct)
- How many employees do you have
Why is it important for entrepreneurs to be clear about the amount of money needed when applying for a loan?
Why is it important for entrepreneurs to be clear about the amount of money needed when applying for a loan?
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What is the significance of repayment corresponding to a milestone in the business plan?
What is the significance of repayment corresponding to a milestone in the business plan?
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