EEE 4653 EXAM 3 FINAL PAPER 2026
COMPLETE ANSWERS VERIFIED
◉ Non-Bank/Bank Non-Traditional Debt Capital (*Customer
Financing*). Answer: -Typically partial prepayment & typically
extremely attractive cost/term
-Normally requires limited customer product/service alternatives
-Risks "scaring" customers away due to perceived poor financial
stability
◉ Non-Bank/Bank Non-Traditional Debt Capital (*Supplier
Financing*). Answer: -Negotiate "extended" trade payment terms
-Typically limited to "special" incremental or large orders
◉ Non-Bank/Bank Non-Traditional Debt Capital (*Purchase Order
Financing*). Answer: -Normally limited to quick (even incremental)
inventory/product sales cycles
-*Very* expensive capital at a 5% to 10% discount against
corresponding Purchase Order
◉ Non-Bank/Bank Non-Traditional Debt Capital (*Credit Cards*).
Answer: Wide cost range but normally considered a high debt cost
, ◉ Debt Capital Preparation Suggestions. Answer: -Strong personal
credit
-Detailed Financial pro-forma statements
-Sufficient Lead-time
-Quality supporting documentation
◉ Debt Capital Preparation Suggestions (*Strong personal credit*).
Answer: -High credit score demonstrates ability to manage finances
-Address & proactively "clean up" any personal credit issues
◉ Debt Capital Preparation Suggestions (*Detailed Financial pro-
forma statements*). Answer: -Illustrate ability and means to
repay/service debt
--Debt Service Ratio > 1.25x ((Principal + Interest)/EBITDA)
--Debt Coverage Ratio < 4.3X (Total Debt/EBITDA)
-Detailed "use of funds" with strong preference for asset creation
◉ Debt Capital Preparation Suggestions (*Sufficient Lead-time*).
Answer: Proactively apply - minimum 6 month lead time
◉ Debt Capital Preparation Suggestions (*Quality supporting
documentation*). Answer: -Personal & business tax returns
-All legal and/or governance documents: Certificate Good Standing,
Bylaws/Articles Incorporation, Board minutes, Capitalization Table
COMPLETE ANSWERS VERIFIED
◉ Non-Bank/Bank Non-Traditional Debt Capital (*Customer
Financing*). Answer: -Typically partial prepayment & typically
extremely attractive cost/term
-Normally requires limited customer product/service alternatives
-Risks "scaring" customers away due to perceived poor financial
stability
◉ Non-Bank/Bank Non-Traditional Debt Capital (*Supplier
Financing*). Answer: -Negotiate "extended" trade payment terms
-Typically limited to "special" incremental or large orders
◉ Non-Bank/Bank Non-Traditional Debt Capital (*Purchase Order
Financing*). Answer: -Normally limited to quick (even incremental)
inventory/product sales cycles
-*Very* expensive capital at a 5% to 10% discount against
corresponding Purchase Order
◉ Non-Bank/Bank Non-Traditional Debt Capital (*Credit Cards*).
Answer: Wide cost range but normally considered a high debt cost
, ◉ Debt Capital Preparation Suggestions. Answer: -Strong personal
credit
-Detailed Financial pro-forma statements
-Sufficient Lead-time
-Quality supporting documentation
◉ Debt Capital Preparation Suggestions (*Strong personal credit*).
Answer: -High credit score demonstrates ability to manage finances
-Address & proactively "clean up" any personal credit issues
◉ Debt Capital Preparation Suggestions (*Detailed Financial pro-
forma statements*). Answer: -Illustrate ability and means to
repay/service debt
--Debt Service Ratio > 1.25x ((Principal + Interest)/EBITDA)
--Debt Coverage Ratio < 4.3X (Total Debt/EBITDA)
-Detailed "use of funds" with strong preference for asset creation
◉ Debt Capital Preparation Suggestions (*Sufficient Lead-time*).
Answer: Proactively apply - minimum 6 month lead time
◉ Debt Capital Preparation Suggestions (*Quality supporting
documentation*). Answer: -Personal & business tax returns
-All legal and/or governance documents: Certificate Good Standing,
Bylaws/Articles Incorporation, Board minutes, Capitalization Table
