As explained in this chapter, a firm’s statement of cash flows is divided into three separate activities.

Which of the activities from the statement of cash flows would be affected by a firm’s decision to use Fundbox’s service? What are some of the potential effects of a small entrepreneurial firm’s decision to use Fundbox on the components of that firm’s statement of cash flows?

Fundbox is an entrepreneurial start-up that offers 12-

and 24-week loans to small businesses. The loans are tied to specific invoices that the businesses have outstanding. Payment for the loans (including principle, interest, and fees) is deducted from a company’s bank account in 12- or 24-equal amounts on a weekly basis.

Once the money for the invoice comes in, the loan can be paid in full. There is no penalty for early payment.

Fundbox was launched in 2012 by Yuval Ariav, Eyal Shinar, and Tomer Michael, who are technological innovators and financial professionals. The firm’s mission is to offer small businesses a common-sense approach to cash-flow management.