Business and Personal Finance © 2007

Chapter 19: Sources of Funding

Practice Tests

1
A(n) _______ is a person who follows his or her dreams by assuming the risk of starting a new business.
A)venture capitalist
B)entrepreneur
C)limited partner
D)"angel"
2
Money used to expand a business comes from the business's _______.
A)start-up capital
B)operating capital
C)reserve fund
D)unsecured loans
3
An example of personal financing is a _______.
A)commercial loan
B)secured loan
C)private investor
D)home equity loan
4
_______ is the highest percentage of market value a home equity loan will provide.
A)20 percent
B)40 percent
C)60 percent
D)80 percent
5
Borrowing money from friends or family is called _______.
A)a home equity loan
B)a commercial loan
C)private financing
D)a secured loan
6
A(n) _______ is an arrangment in which bank customers can borrow a certain amount of money from the bank immediately.
A)line of credit
B)secured loan
C)unsecured loan
D)commercial loan
7
Comments from creditors help banks to determine a would-be borrower's _______.
A)character
B)capacity
C)capital
D)collateral
8
High interest rates are a disadvantage of funding a business with _______.
A)a home equity loan
B)private funding
C)a business credit card
D)a commercial loan
9
_______ are private investment firms that work with the SBA to provide longer-term funding for small businesses.
A)banks
B)Small Business Investment Companies (SBICs)
C)commercial finance companies
D)private investors
10
The _______ is a government loan program that allows businesses applying for loans of less than $150,000 to submit a one-page application with a small amount of documentation.
A)personal financing
B)Small Business Administration
C)Small Businesss Investment Companies
D)LowDoc Program
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