10 Questions
What is the form of equity capital that may be used as collateral or rediscounted?
Accounts Receivables
Which source of capital is typically associated with maturities of more than five years?
Long term Creditor/s’ Capital
Which entity offers loans not exceeding the cash value of your policies?
Insurance Companies
What type of companies deal mostly on secured loans to persons refused by banks, but give relatively higher interest rates?
Finance Companies
Which form of equity capital is put into the business from the investors’ personal resources?
Investor/s’ Personal Resources
Which source of capital may be in the form of promissory notes and used as collaterals or rediscounted?
Accounts Receivables
What type of companies provide numerous financing and leasing services, dealing mostly on secured loans to persons refused by banks but with relatively higher interest rates?
Finance Companies
Which form of equity capital is put into the business from the investors’ personal resources?
Investor/s’ Personal Resources
Which entity offers loans, but only on certain conditions and mostly not exceeding the cash value of your policies?
Insurance Companies
What is the most common source of capital for today’s borrowers, with a large array of options to choose from?
Banks
Study Notes
Forms of Capital
- Commercial bills and promissory notes are forms of equity capital that may be used as collateral or rediscounted.
Long-Term Capital
- Debt capital with maturities of more than five years is typically associated with long-term financing.
Insurance-Backed Loans
- Insurance companies offer loans not exceeding the cash value of your policies.
Secured Loans
- Finance companies deal mostly with secured loans to persons refused by banks, but with relatively higher interest rates.
Internal Equity Capital
- Owner's equity is a form of equity capital put into the business from the investors' personal resources.
Short-Term Financing
- Commercial bills and promissory notes can be used as a source of capital and can be rediscounted.
Financing Services
- Finance companies provide numerous financing and leasing services, dealing mostly with secured loans to persons refused by banks, but with relatively higher interest rates.
Insurance-Based Financing
- Insurance companies offer loans, but only on certain conditions and mostly not exceeding the cash value of your policies.
Common Sources of Capital
- The most common source of capital for today's borrowers is the banking system, with a large array of options to choose from.
Test your knowledge on the types and sources of equity capital with this quiz. Learn about equity capital, retained earnings, advanced payments from customers, and sales of stocks.
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