Question :
11) Which form of financing works especially well for manufacturers, : 2033478
11) Which form of financing works especially well for manufacturers, wholesalers, distributors, and other companies with significant stocks of inventory, accounts receivable, equipment, real estate, or other assets?
A) Asset-based lenders
B) Corporate investors
C) Government funding
D) None of the above
12) Asset-based borrowing permits small businesses:
A) to borrow up to 100% of the value of their inventory or their accounts receivable for the money they need for long-term goals.
B) to use normally unproductive assets–accounts receivable and inventory.
C) to obtain loans more easily but with less borrowing power than if they used an unsecured line of credit.
D) access to a source of funds ideally suited for long-term financing needs.
13) In asset-based borrowing, the ________ is the percentage of an asset's value that a lender will lend.
A) prime rate
B) margin rate
C) advance rate
D) discounted rate
14) The most common form of secured credit is:
A) accounts receivable financing.
B) inventory financing.
C) floor planning.
D) discounted installment contracts.
15) ________ is/are an asset-based financing technique.
A) Discounted installment contracts
B) Inventory financing
C) Installment lending
D) Floor planning
16) Asset-based lenders avoid inventory-only deals; they prefer to make loans backed by inventory and:
A) experienced management.
B) good market reputation.
C) more secure accounts receivable.
D) All of the above
17) Asset-based financing:
A) is efficient since the small business borrows only the money it needs.
B) provides less borrowing capacity than inventory-based financing.
C) is more expensive than other types of financing.
D) is less desirable than inventory-only deals to bankers.
18) When a small business is refused a loan because it is not profitable and deemed a poor credit risk, the owner can usually turn to ________ as a source of short-term funds.
A) venture capital companies
B) trade credit
C) stockbrokers
D) loans from insurance companies
19) Janis Reardon is in the process of launching a craft shop. Her biggest supplier, Lothrop's Craft Supply, agrees to sell her the inventory she needs to stock her store on a delayed payment schedule. Janis is using what type of financing?
A) Line of credit
B) Floor planning
C) Trade credit
D) Asset-based borrowing
20) The most common method used by commercial finance companies to provide credit to small businesses is:
A) asset-based.
B) insurance-based.
C) unsecured lines of credit or "character loans."
D) balance-sheet based.
