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    Jersey Ann Alcazar
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    Some entrepreneurs are hesitant to take out commercial bank loans due to the challenges involved in raising funds from lenders and investors, such as proving their business is creditworthy and meeting financial interests. Instead, some resort to social bricolage, or leveraging personal relationships, to obtain financing from family and friends. Keeping close track of cash flows is more important for entrepreneurs than profits alone, as cash flows allow a business to continue operating and identify opportunities for expansion, while profits do not show the full financial picture. Both advantages and disadvantages exist with credit financing - it provides large amounts of capital but can be difficult to arrange, so alternative options are also considered.

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    Some entrepreneurs are hesitant to take out commercial bank loans due to the challenges involved in raising funds from lenders and investors, such as proving their business is creditworthy and meeting financial interests. Instead, some resort to social bricolage, or leveraging personal relationships, to obtain financing from family and friends. Keeping close track of cash flows is more important for entrepreneurs than profits alone, as cash flows allow a business to continue operating and identify opportunities for expansion, while profits do not show the full financial picture. Both advantages and disadvantages exist with credit financing - it provides large amounts of capital but can be difficult to arrange, so alternative options are also considered.

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    22 views2 pages

    St. Therese Montessori School of San Pablo, Inc

    Uploaded by

    Jersey Ann Alcazar
    Some entrepreneurs are hesitant to take out commercial bank loans due to the challenges involved in raising funds from lenders and investors, such as proving their business is creditworthy and meeting financial interests. Instead, some resort to social bricolage, or leveraging personal relationships, to obtain financing from family and friends. Keeping close track of cash flows is more important for entrepreneurs than profits alone, as cash flows allow a business to continue operating and identify opportunities for expansion, while profits do not show the full financial picture. Both advantages and disadvantages exist with credit financing - it provides large amounts of capital but can be difficult to arrange, so alternative options are also considered.

    Copyright:

    © All Rights Reserved
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    of 2

    ST. THERESE MONTESSORI SCHOOL OF SAN PABLO, INC.

    Preschool * Grade School * Junior & Senior High School Levels San
    Nicolas, San Pablo City, Laguna
    Tel. (049) 530-77-83 / 530-77-33

    Written Work 8 in Entrepreneurship


    A. Y 2021-2022

    Answer the following questions.

    1. Why is it important for entrepreneurs to know the principles of financial management?


     The principles of financial management have a huge impact on every entrepreneur and
    their business since it covers the management of financial transactions, strategic planning,
    and organizing of a business, which are the most important aspects that an entrepreneur
    should look in.

    2. What are the challenges in raising funds for new business ventures?
     Raising funds for a new business venture may be difficult and filled with challenges. The
    first challenge in raising funds is proving to lenders and investors that the company is a
    creditworthy business. It is difficult to lend or invest a large amount of money, which is
    why an entrepreneur must earn the trust of both lenders and investors. Next, when it comes
    to raising finances, a company should consider the viewpoints and interests of lenders and
    investors. Lastly, alternative financial intermediation venues must be understood.

    3. Is it more important for an entrepreneur to keep track of profits or cash flows? Explain your
    answer.
     The most significant thing for an entrepreneur to keep track of is cash flow, which
    indicates the inflow and outflow of every financial transaction in their company. Cash
    flow is more significant since it allows the company to continue operating while still
    making a profit. Cash flow may also assist in business expansion since it allows you to
    identify how you can expand your company.

    4. What are the advantages and disadvantages of credit financing?


     Credit financing contains both advantages and disadvantages. The major advantage is the
    large amount of money that may be acquired. There is almost always a disadvantage to
    every advantage, and the disadvantage here is the difficulty of drafting and issuing bonds,
    securities, stocks, and other commercial papers on the capital market.

    5. Why are some entrepreneurs hesitant to avail of commercial bank loans? Why do some of
    them resort to social bricolage, in terms of financing their businesses?

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