Flashcards on Entrepreneur's Business Planning Guide
Entrepreneur's Business Planning Guide: Startup Success
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Small Business Finance
44 cards
Card 1
Question: What is a key advantage of bank finance for a small business?
Answer: You don't have to give up any control over your business.
Card 2
Question: What is a major challenge or disadvantage when seeking bank finance?
Answer: The process can be complex and time‑consuming and you must prove you can make repayments; banks often view first‑time owners as too risky.
Card 3
Question: Why might government grant funding be attractive to start-up business owners?
Answer: Grant funding does not need to be repaid and does not require giving up control of the business.
Card 4
Question: What are the main downsides of applying for government grant funding?
Answer: Selection criteria are strict, the paperwork is intense, the process is lengthy, and your business must align with a specific project or agency.
Card 5
Question: What types of financial support can government departments and agencies offer to start-ups?
Answer: Support ranges from small loans of a few thousand to loans into the millions.
Card 6
Question: How are government department/agency loans similar to government grants in terms of disadvantages?
Answer: They share the same cons as grants: strict criteria, intense paperwork, and lengthy processes.
Card 7
Question: List the investor qualities that keep investors interested in business owners.
Answer: Understand their business and industry; high business acumen; run the business with honesty, integrity, and transparency; show passion for the busines
Card 8
Question: What are the 5 Cs of Credit used by traditional lenders?
Answer: Capacity, Capital, Collateral, Character, Conditions.
Card 9
Question: What does 'Capacity' refer to in the 5 Cs of Credit?
Answer: The business’s ability to repay loans—lenders want assurance the business generates enough cash flow to repay in full.
Card 10
Question: What does 'Capital' mean in the 5 Cs of Credit and why is it important?
Answer: Capital is the cash you invest in the business; it shows lenders how serious you are and should be recorded to show your investment.