SBA Financial Management & Funding Resources 5

Question 1

What is the purpose of a personal financial statement in an SBA loan application?

Accepted Answer

To demonstrate the owner's personal net worth and ability to guarantee the loan

Answer

Lenders require personal financial statements to assess the owner's personal net worth, assets, and liabilities, which are relevant because SBA loans typically require a personal guarantee.

Question 2

Which of the following best describes 'accounts receivable' on a business balance sheet?

Accepted Answer

Money owed TO the business by customers for goods or services delivered

Answer

Accounts receivable represents money owed to the business by customers who have received goods or services but have not yet paid, classified as a current asset.

Question 3

In SBA lending, what is a 'personal guarantee'?

Accepted Answer

The owner's legal commitment to repay the loan from personal assets if the business cannot

Answer

A personal guarantee is a legal agreement in which the business owner personally commits to repay the loan using personal assets if the business defaults, removing the corporate liability shield.

Question 4

What does the term 'amortization' refer to in the context of a business loan?

Accepted Answer

Gradually paying off a loan through scheduled principal and interest payments

Answer

Loan amortization is the process of paying down a loan balance through regular scheduled payments that cover both principal and interest over the loan's term.

Question 5

Which SBA program specifically provides financial assistance to businesses owned and controlled by socially and economically disadvantaged individuals?

Accepted Answer

SBA 8(a) Business Development Program

Answer

The SBA 8(a) Business Development Program helps eligible socially and economically disadvantaged small businesses compete for federal contracting opportunities and access business development assistance.

(SBA) Small Business Administration Certified Business Practice Test

(SBA) Small Business Administration Certified Business Practice Test

SBA Financial Management & Funding Resources 5