Unit quiz: Reading the file the way underwriting reads it

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

A file contains a clean UCC search result showing no financing statements naming the business, and a document from a prior funder whose financing statement names the owner personally. What has the search established?It establishes that no perfected filing names the business entity, which is only part of the priority picture. The personal filing still needs to be read, checked for its status on the record, and accounted for in any guarantee or lien discussion.It establishes that the business has no liens at all, because a search naming the business returned nothing and the personal filing cannot attach to business assets.

Question 2

Twelve weeks of statements show $284,600 of gross deposits, including $18,000 of owner transfers, $25,000 of equipment loan proceeds and $12,400 of transfers from a related account. Existing debits are $2,750 a week. What is the proposed $1,600 weekly remittance as a share of normalized deposits?Normalized deposits are $284,600, or $23,716.67 a week, so $1,600 is 6.75 percent and combined debt service is 18.34 percent.Normalized deposits are $229,200, or $19,100 a week, so $1,600 is 8.38 percent, and combined debt service of $4,350 is 22.77 percent.

Question 3

Monthly receipts total $657,500, averaging $54,791.67, with a trough of $38,000 in February and a peak of $72,000 in July. A fixed $5,600 weekly schedule equals $24,266.67 a month. What does the season analysis show?The obligation is 63.86 percent of February receipts and 33.70 percent of July receipts, and it exceeds 45 percent of receipts in six of twelve months, so the fixed schedule does not match the season.The obligation is 44.29 percent of average monthly receipts, which is within a normal range, so the schedule is acceptable as long as the annual total is covered.

Question 4

Eligible receivables are $220,000, the largest customer owes $136,400 and represents 62 percent of revenue, and the borrowing base excludes receivables above a 25 percent single-obligor limit, advanced at 80 percent. What is availability with and without the limit?With the limit availability is $138,600 and without it $220,000, because the concentration limit applies to availability rather than to the eligible base.With the limit the cap is $55,000, eligible receivables fall to $138,600 and availability is $110,880; without the limit it appears to be $176,000, an overstatement of $65,120.

Question 5

A bakery wants $120,000 for a six-month ingredient purchase and a seven-year laminator. What does the needs analysis require before a product is discussed?Separate the two uses by amount, duration, timing and repayment source, since six months and seven years are different needs that should be matched to instruments rather than blended into one schedule.Present one blended $120,000 schedule, because the total amount is the same and a single payment stream is easier for the merchant to manage.

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