Chap 4.0 Small Business

Front 1

Assets

Back 1

Items of value owned by the business.

Front 2

Contingency fund

Back 2

Cash that is set aside for unexpected needs of the business

Front 3

Continuing costs

Back 3

The ongoing expenses resulting from the operation of the business

Front 4

Credit unions

Back 4

Cooperatives formed by labor unions or employees for the benefit of the members.

Front 5

Credit-worthy

Back 5

Willing and able to repay a debt

Front 6

Debt sources

Back 6

Sources of funding that require the money borrowed to be paid back with interest.

Front 7

Equity sources

Back 7

Capital sources that trade cash for some portion of ownership in the business; sometimes called risk capital because the investor puts his/her money at risk.

Front 8

Expenses

Back 8

The cost of doing business; all business expenses except the cost of goods sold.

Front 9

Fixed costs

Back 9

Expenses that remain the same for a period of time; must be paid regardless of the quantity of a good or service produced/sold.

Front 10

Government agencies

Back 10

Operated by the government to provide technical assistance, counseling, grants, or other means of financial assistance at low-interest rates.

Front 11

Liabilities

Back 11

Debts owed by the business

Front 12

Lines of credit

Back 12

Agreements made by a bank to lend money at a stated interest rate whenever the owner needs it. A fee is charged for the privilege whether the money is used or not, and interest is charged on any money that is used.

Front 13

Long-term loan

Back 13

Borrowed money that is repayable over a period longer than a year

Front 14

Net worth

Back 14

The monetary value of the business; assets minus liabilities.

Front 15

Personal expenses

Back 15

Expenses incurred by the entrepreneur for goods and services for personal use rather than for use in the business.

Front 16

Private investors (angels)

Back 16

Wealthy individuals functioning as non-professional investors who are willing to invest in local businesses for financial or emotional reasons and who sometimes prefer to remain anonymous.

Front 17

Repayment plan

Back 17

A plan indicating how and when debts of the business will be paid.

Front 18

Secured loan

Back 18

A loan that is backed by collateral.

Front 19

Short term loan

Back 19

Borrowed money that must be repaid within one year.

Front 20

Start up costs

Back 20

One-time expenses an entrepreneur incurs when starting a business.

Front 21

State-sponsored venture capital funds

Back 21

Funds provided to entrepreneurs by the state in an effort to encourage economic development and creation of jobs

Front 22

Trade credit

Back 22

Short-term financing that allows an entrepreneur credit from vendors within the business’s industry or trade.

Front 23

Unsecured-loan

Back 23

A loan that is not guaranteed by collateral

Front 24

Variable costs

Back 24

Expenses that may change from month to month depending on the needs of the business; costs that increase and decrease with the quantity of the good or service produced/sold.

Front 25

Venture capitalists

Back 25

Individuals or firms that invest money professionally to make money, expect a large capital gain, and look for high growth potential.