Financing Activities: Definition & Examples


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question 1 of 3

Which of the following is not one of the three main concerns a lender must consider when deciding to extend financing to a small business owner?

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1. How is a potential borrower's character evaluated when it comes to borrowing money from a financial institution?

2. Which financial statements will a lender not want to see from a business owner to determine the owner's capacity to repay?

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About This Quiz & Worksheet

This quiz and worksheet combo will assess your knowledge of financing activities. For the quiz, you'll need to be familiar with the priorities of a lender and the criteria involved in lending decisions.

Quiz & Worksheet Goals

These tools will test your knowledge of:

  • The three main considerations of a lender when deciding whether or not to extend financing
  • How a lender determines a business owner's capacity to repay a loan
  • How a lender evaluates a potential borrower's character
  • What qualifies as collateral
  • How economic factors may determine a lender's decision on a loan

Skills Practiced

  • Reading comprehension - ensure that you draw the most important information from the related lesson on financing activities
  • Making connections - use your understanding of the concept of the 5 Cs of Credit in different contexts
  • Knowledge application - use your knowledge to answer questions about financing activities and the 5 Cs of Credit

Additional Learning

To ensure your understanding of the topic, review the accompanying lesson, Financing Activities: Definition & Examples. The lesson highlights the following objectives:

  • Define financing
  • Identify the three main priorities of most banks
  • Learn the 5 Cs of Credit
  • Describe the importance of each of the 5 Cs of Credit