10 Questions
What is a key difference between a business credit card and a personal credit card?
Business credit cards require a business bank account, while personal credit cards do not.
How does a bank overdraft differ from a bank loan?
Bank loans require repayment whenever the bank demands, unlike bank overdrafts.
What is a characteristic of a cash advance that makes it more flexible than a credit card?
Cash advances are linked to future income, making payback more flexible.
Why is it important for business owners to carefully monitor employee spending and access to cards?
To ensure employees do not use the cards for personal expenses.
In what way does the total amount to be paid back for a cash advance differ from a bank loan?
The total amount for a bank loan is fixed, while for a cash advance it varies based on income.
What are some advantages of using internally generated capital for funding?
Simplicity, autonomy, less dilution of ownership
Why might startups and small companies struggle to self-finance large investments or rapid growth?
Generating sufficient retained earnings may be challenging for startups and small companies.
What is the key characteristic of venture capital funding for startups?
Venture capital firms typically take equity stake positions in return for their investment.
How do angel investors differ from venture capitalists in terms of the amounts of capital they offer?
Angel investors tend to offer smaller amounts of capital compared to venture capitalists.
Explain the difference between grants and traditional forms of funding in terms of repayment obligations.
Grant recipients aren't obliged to repay the funds unless specific conditions outlined in the agreement fail to meet.
Learn about private equity financing, which are funds invested directly into private companies. Discover the advantages of using this source, such as easy access to diverse forms of capital, as well as the disadvantages, including loss of control due to investors taking substantial control of the organization.
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