Unit quiz: Disclosure, distress and recommendation capstone

Check understanding, separately from reading

5 questions · 80% to pass · no timer. This quiz checks the lessons in this unit. These authored questions assess recognition and application of the taught distinctions, not professional qualification. You may review the lessons and retry. Repeat attempts reuse the question bank; a remembered answer is not proof of transfer to a new situation.

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Question 1

The same broker speaks with owners in different states about sales-based financing. A disclosure prepared for one offer and jurisdiction cannot simply be relabeled for the other. Product classification and provider roles also matter.

Owner: “Your New York sheet proves this is compliant everywhere?”No. We need the current rules that apply to this transaction and each relevant role and jurisdiction.Yes. A single state form replaces every state’s requirements.

Question 2

A fictional restaurant is behind on taxes, payroll and several advances. A delayed receivable may be one issue, but layering another debit without a viability review can compound the problem. Ask about actual cash and existing provider communication; do not direct the owner to stop paying.

Owner: “Tell me to block all debits and take another advance.”Block the accounts now; it automatically eliminates the obligations.I cannot prescribe evasion or guarantee a rescue; let us pause and seek qualified legal and cash-flow advice.

Question 3

A fictional proposal shows attractive first-week net cash, but the old debits continue and the new provider can suspend deposits after a covenant breach. The merchant still owes obligations. Test a late deposit, early suspension and a slow-sales case before calling the arrangement relief.

Owner: “The first week improves; that proves the whole plan works?”No. We need the full lifecycle, surviving balances and suspension scenarios, with independent contract review.Yes. A favorable first-week net amount proves lower total cost and no exit risk.

Question 4

Harbor: “The factor is high, I have two advances and my accountant dislikes daily payments.” A strong response acknowledges all three, asks permission to compare, and leaves open the possibility that no new financing is suitable. Do not answer only the easiest objection.

Owner: “Can you guarantee approval if I sign before the accountant calls?”Yes. Signing first avoids underwriting questions and locks guaranteed approval.No. Let us review the existing obligations and full costs with your accountant before any decision.

Question 5

Fictional Ridge wants a machine, carries an existing secured line, has seasonal receipts and is offered layered funding plus a personal HELOC. Separate machine finance from working capital, investigate lien restrictions, reject “HELOC equals business LOC,” and stress the full payment schedule. A documented pause is a successful result if evidence is insufficient.

Owner: “Which conclusion is defensible before missing records arrive?”A conditional comparison with identified gaps and a pause on commitment, not a guaranteed product recommendation.Pick the fastest product and describe all unknown terms as standard.

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