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QUESTION 19 Which of the following statements is false: The greater the perceived risk, the less amount of equity a lender will require a borrower
QUESTION 19 Which of the following statements is false: The greater the perceived risk, the less amount of equity a lender will require a borrower to provide in order to secure a loan. Financial leverage refers to the entrepreneur's ability to utilize debt to increase ROI. Collateral is an asset that is offered to the lender as loan insurance. A balloon payment is often necessary due to the lower principal paid back in the early part of the loan. QUESTION 20 Which of the following statements is false: Collateral is an asset that is offered to the lender as loan insurance. There are more sources for debt financing, and it is normally easier to obtain than equity. Borrowers must consider the effective borrowing rate which factors in compounding periods, hidden fees, and lender charges. A mini-perm loan is a hybrid of a permanent loan of which the term is about ten years
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