Mixed Deck — All SBA Topics Flashcards

Which financial ratio measures a company's ability to meet short-term obligations?

Answer: Current ratio

The current ratio is a key financial metric that measures a company's ability to meet its short-term obligations (those due within one year) using its current assets. It is calculated by dividing current assets by current liabilities. A higher current ratio generally indicates better short-term liquidity and financial health, signaling that the company has sufficient resources to cover its immediate debts.

What is the maximum loan amount available under the SBA Export Express program?

Answer: $500,000

The SBA Export Express program provides fast access to export financing with a maximum loan amount of $500,000 for eligible small businesses.

Which SBA resource provides free, confidential business mentoring and advice through a network of volunteer expert business mentors?

Answer: SCORE

SCORE is a nonprofit association supported by the SBA that provides free business mentoring and education through a nationwide network of volunteer business mentors.

What is an elevator pitch?

Answer: A quick, engaging business summary

An elevator pitch is a concise, persuasive summary of a business idea, product, or service, designed to be delivered in a short amount of time, typically 30-60 seconds. Its purpose is to quickly capture interest and convey the core value proposition to potential investors, partners, or customers. It's a vital tool for networking and initial introductions.

What does 'mobile commerce' (m-commerce) refer to for small businesses?

Answer: Conducting business transactions through mobile devices such as smartphones and tablets

M-commerce refers to commercial transactions conducted via mobile devices, including mobile payments, shopping apps, and mobile-optimized websites.

What is 'intellectual property' in the context of a small business?

Answer: Intangible creations of the mind such as inventions, brand names, and creative works

Intellectual property (IP) refers to intangible assets created through human intellect, including patents, trademarks, copyrights, and trade secrets.

What role does a Customer Relationship Management (CRM) system play in small business operations?

Answer: Organize and manage customer interactions, sales pipelines, and communication history

A CRM system centralizes customer contact information, interaction history, and sales opportunities, helping businesses build stronger customer relationships and increase sales.

Which term describes the point at which a business's total revenues equal its total costs, resulting in neither profit nor loss?

Answer: Break-even point

The break-even point is where total revenue equals total costs (fixed + variable), meaning the business covers all expenses but has not yet generated profit.

What is the primary purpose of conducting competitive analysis for a small business?

Answer: Understand competitors' strengths and weaknesses to identify market opportunities

Competitive analysis helps businesses understand their rivals' products, prices, and strategies in order to identify gaps and opportunities to differentiate themselves.

Which of the following is NOT a typical use of proceeds for an SBA 7(a) loan?

Answer: Paying personal income taxes of the business owner

SBA 7(a) loans cannot be used to pay personal expenses, including the owner's income taxes; funds must be used for legitimate business purposes.

What is a business continuity plan?

Answer: Emergency operations plan

A business continuity plan (BCP) is an essential emergency operations plan that outlines how a business will continue to function during and after a disruptive event, such as a natural disaster, cyberattack, or power outage. Its purpose is to minimize downtime, protect critical assets, and ensure the rapid recovery of essential business operations.

Which section of a business plan describes the target market?

Answer: Market analysis

The market analysis section of a business plan is dedicated to understanding the industry, target customers, and competitive landscape. It details the size of the market, customer demographics, needs, and purchasing behaviors. This section is vital for demonstrating a clear understanding of the business's potential audience and how it plans to serve them.

The SBA's Lender Match tool is designed to help small business owners do what?

Answer: Connect with SBA-approved lenders who may offer suitable loans

Lender Match is a free SBA online referral tool that connects small business owners with participating SBA-approved lenders based on their financing needs.

What is 'networking' most valuable for in small business entrepreneurship?

Answer: Building relationships that lead to referrals, partnerships, and business opportunities

Networking builds professional relationships that generate referrals, partnerships, mentorship, and access to resources and opportunities essential for business growth.

What is 'artificial intelligence (AI)' application in small business operations?

Answer: Using AI tools to automate tasks, analyze data, and personalize customer experiences to improve efficiency

Small businesses can use AI-powered tools to automate repetitive tasks, gain customer insights from data, and personalize marketing at scale, competing more effectively with larger companies.

What is a 'value proposition' in the context of small business development?

Answer: A clear statement of the unique benefit a business provides to its customers

A value proposition is a concise statement that explains how a product or service solves a customer's problem and why it's better than alternatives.

What is 'working capital' in small business financial management?

Answer: Current assets minus current liabilities

Working capital = Current Assets − Current Liabilities, representing the liquid resources available to fund day-to-day business operations.

Under the SBA 8(a) Business Development program, what is the maximum length of time a firm can participate?

Answer: 9 years

The 8(a) Business Development program is a 9-year program divided into a 4-year developmental stage and a 5-year transition stage.

Which is an example of an alternative funding source?

Answer: Crowdfunding

Crowdfunding is an alternative funding source where a large number of people contribute small amounts of money, typically through online platforms, to finance a project or venture. Unlike traditional bank loans or internal funds, it leverages collective contributions from a broad audience. This method provides startups and small businesses with access to capital without relying on conventional financial institutions.

What is a data breach and what is the primary obligation for small businesses when one occurs?

Answer: Unauthorized access to sensitive customer data; notify affected customers and comply with applicable breach notification laws

A data breach involves unauthorized access to protected data, and most U.S. states require businesses to notify affected individuals and relevant authorities when personal data is compromised.