SBM I Test 3

• Profits
• Customers
• Suppliers - Trade credit

• common stoock
• preferred stock
• ????????

the SBA's primary bsiness loan program  to help qualified small businesses obtain financing 

• 1. low cost, may save money
• 2. careful mgmt makes external  sources more available
• 3. low risk
• 4. maximum flexibility
• 5. you retain control

a line of credit secured by working capital assets

a loan  for which items of inventory or other movable property serve as collateral

the difference between current assets and current liabilities

cash reserves.

all assets that can be readily  converted into  cash.

the current asset items consisting of cash,  inventories, and A/R.

issued by banks and other lending institutions for short periods, generally thirty to ninety days, but given up to six months

these notes are usually repaid in one lump sum on the maturity date.

often there is no collateral on these loans, although some may be required, depending on the borrower's credit standing.

a compensating balance may also be required.

this means that some portion of the loan must remain in one of the business's accounts at the bank.

represents ownership in the corporation.

a legal form of organization whereby  legal entity is authorized by a state to operate a business under the entity's charter or articles of incorporation.

debt is classified by the length of  time that you have to pay it back.

capital invested by owner(s)

those that are generated by the invested capital of a firm

cash, inventories, A/R

buildings, land/property, machinery, furniture, etc.

vehicles, fixtures, etc.

commercial notes, A/R financing, factoring, inventory loans, line of credit, etc.

obtaining cash before payments are received from customers by selling off one's acounts receivable to a third party

another type of accounts receivble.

long-term capital that is invested in the small business

funds invested in long-term assets

assets that will be retained for a very long time

the issuance of stock that is to be traded in public financial markets

profits, customers, suppliers-trade credit

equity, debt financing, banks

an understanding between a bank and the business indicating the maximum amount the bank is willing to loan the borrower

debt with a maturity date beyond five years

a loan secured by a mortgage on property

• 1. to start a new business
• 2. the establishment & maintaining working capital
• 3. seasonal peaks
• 4. equipment
• 5. physical expansion

a form of legal organization in which a business association made up of two or more persons is formed for the purpose of carryinng on as co-owners

a legal form of organization whereby the business is owned and operated by one person

issued to a company that can prove it has financial strength & profitability to repay the loan

owners contribute 40-50% of the required equity

circulating capital