busfin source of funds

Question 1

is an important part of every business because it provides funds for business activities, acquire purchases or
investing.

Answer 1

Financing

Question 2

such as banks, cooperatives and
other financial companies are the one that will provide loans for their capital to help them achieve their business goals.

Answer 2

Financial institutions

Question 3

is essentially the act of raising capital by borrowing money from a lender or a bank, to be repaid at a future date.

Answer 3

Debt financing

Question 4

is when you raise money by selling shares in your business, either to your existing shareholders or to a new investor.

Answer 4

Equity financing

Question 5

Used to finance the day-to-day operations of the company. It is used for working capital requirements and bridge financing where a company has some maturing obligations.

Answer 5

Short term funds

Question 6

This fund is sometimes called “capital investment.” This is used for long-term investments that include expansion, buying new equipment or buying a piece of land as site for future expansion.

Answer 6

Long term funds

Question 7

5 Cs of Credit

Answer 7

Character
Capacity
Collateral
Capital
Conditions

Question 7

The 5 duties of the borrower to creditors

Answer 7

-Pay the creditors based on the payment schedule agreed upon.
-Provide the collaterals as agreed upon in the loan negotiation with proper documentation, if necessary and if applicable
-Comply with the provisions of loan covenant such as maintaining certain liquidity and leverage ratios.
-Notify the creditor if the company is acquiring another company or the company is now the subject of acquisition.
-Do not default on the loans as much as possible.

Question 8

Types of Loan

Answer 8

Personal Loan
House Loan
Auto Loan

Question 9

Allows an individual to buy a vehicle that is more expensive than what could be afforded in a lump sum, or cash purchase.

Answer 9

Auto Loan

Question 9

This loan granted to homeowners and individuals who want to have their own homes but do not have enough savings or liquid funds to make immediate purchase or other improvements.

Answer 9

House Loan

Question 10

This is a type of loan from banks that may or may not require any form of collateral as security of payment. Sometimes called “character loan.”

Answer 10

Personal Loan

Question 11

includes the name or business name, birthdate, address, SSS no. TIN no. phone no. and other identifying information such as valid government-issued identification cards.

Answer 11

Demographics

Question 11

What are the usual loan requirements and application?

Answer 11

Demographics
Income or revenue
Assets and Liabilities
Contact or references
Attest and authorization

Question 12

refers to current personal income and employer, employment and salary history, and business revenue, if there is already an existing business.

Answer 12

Income or revenue

Question 13

applicants may ask to disclose their checking savings and investment accounts and their outstanding loans and credit cards, if there are any.

Answer 13

Assets and Liabilities

Question 14

require identification and contact information of existing employers, previous employers, or even nearest relative not living with the identified contact.

Answer 14

Contact or references

Answer 14

Attest and authorization