Financing a Business Flashcard

Front

What is the primary purpose of financing a business?

Back

To obtain necessary funds for operations and growth

Front

The process of funding a new business or venture by a large number of investors over the internet is called:

Back

Crowdfunding

Front

Websites like Prosper.com and LendingClub.com bring together investors and borrowers that both can benefit financially. These would be examples of: Commercial loans, Crowdfunding, Peer-to-peer lending, Venture capital firms

Back

Peer-to-peer lending

Front

In addition to the financial support, one of the benefits of being funded by a venture capital firm is that it comes with:

• Full control of the business
• Guidance and advice
• Lines of credit
• The freedom to make decisions

Back

Guidance and advice

Front

Instead of waiting for her customers to pay what they owe, Jasmine sold her accounts receivable, at a discount, to another company. This company will then attempt to collect the full amount from Jasmine’s customers, making a profit. This type of financing is called:

Back

Factoring

Front

What is the type of financing where goods are received from suppliers without requiring payment at the time of delivery?

Back

Trade credit

Front

Any profits that are earned and reinvested into a company are called:

Back

Retained earnings

Front

Short-term promissory notes issued by large corporations to finance their business are called: Commercial paper, Covenants, Factors, Trade credit

Back

Commercial paper

Front

Raising funds for a company by issuing bonds or borrowing from banks are examples of:

Back

Debt financing

Front

Which of the following is NOT an example of long-term financing for a business? Debt financing, Equity financing, Retained earnings, Trade credit

Back

Trade credit