EFim12Ed3 - Chapter 12 OTHER FINANCING ALTERNATIVES FOCUS...

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Chapter 12 OTHER FINANCING ALTERNATIVES FOCUS In this chapter, we consider a variety of government and private sources of new venture funding. We also consider financing traditionally available only to more mature ventures including commercial banking loans. LEARNING OBJECTIVES 1. Identify relevant sources of debt-oriented financing 2. Discuss government loan guarantee and microcredit programs 3. Identify several potential sources of funding for minority-owned enterprises 4. Explain what differentiates venture lending and leasing from traditional lending and leasing 5. Describe factor financing and compare it to receivables financing through a bank CHAPTER OUTLINE 12.1 FACILITATORS, CONSULTANTS, AND INTERMEDIARIES 12.2 COMMERCIAL AND VENTURE BANK LENDING 12.3 UNDERSTANDING WHY YOU MAY NOT GET DEBT FINANCING 12.4 CREDIT CARDS 12.5 SMALL BUSINESS ADMINISTRATION PROGRAMS A. Overview of what the SBA does for Small Businesses B. Selected SBA Loan and Operating Specifics C. Financing E. Financing/Other SBA Loan Programs F. Federal Government Contracting Assistance H. Business Information Services I. Advocacy J. Loans for Homes and Personal Property K. Loans for Businesses L. Assistance for Exporters M. Assistance for Native Americans N. Assistance for Small and Disadvantaged Businesses O. Assistance for Veterans P. Assistance for Women 12.6 OTHER GOVERNMENT FINANCING PROGRAMS 12.7 RECEIVABLES LENDING AND FACTORING 12.8 DEBT, DEBT SUBSTITUTES, AND DIRECT OFFERINGS A. Vendor Financing: Accounts Payable and Trade Notes 215
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Chapter 12: Other Financing Alternatives B. Mortgage Lending C. Traditional and Venture Leasing D. Direct Public Offers SUMMARY APPENDIX: FUNDING SOURCES FOR COLORADO (AS OF 5/7/2004) DISCUSSION QUESTIONS AND ANSWERS 1. What are the five C’s of Credit Analysis? The five C’s of credit analysis are capacity, capital, collateral, conditions, and character. 2. Name three of the common loan restrictions and explain their relation to new venturing financing. What are some additional common loan restrictions? While many different restrictions can be placed on businesses, a few are described here: (1) Limits on total debt are placed on venture firms to limit the amount of leverage the firm has; (2) Dividend restrictions are placed on firms to prevent the firm from paying out the newly issued debt in the form of a dividend; and (3) Maintenance of financial statements may be required to provide the lending institution with a current representation of the company’s financial situation. See Figure 12.2 for some additional common loan restrictions including: (4) restrictions on additional capital expenditures, (5) restrictions on sale of fixed assets, (6) performance standards on financial ratios, and (7) current tax and insurance payments. 3.
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This note was uploaded on 12/05/2009 for the course FIN Fin 595 taught by Professor Shabbir during the Spring '09 term at CSU Dominguez Hills.

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EFim12Ed3 - Chapter 12 OTHER FINANCING ALTERNATIVES FOCUS...

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