Question

In order to earn some extra money to pay for college, you have decided to open your own tattoo parlor one block from campus. You come up with a business plan and realize that you will need financing to get your business off the ground. You appear on a reality show where you pitch your idea to potential investors. Someone likes your business idea, and they write you a check to get things going. Is this financing option direct or indirect?

Answer 1

The correct answer is: Indirect.

Step-by-step explanation:

Indirect financing refers to pooling money from sources that are not from the entrepreneurs themselves. Investors come into play to provide entrepreneurs the capital needed for them to develop their business idea. For such a purpose, entrepreneurs make detailed business plans where they include different analyses of why the venture could be successful in an attempt to attract capital.

Answer 2

Indirect Financing

Step-by-step explanation:

Direct financing is when the borrower borrows money directly from the market such as issuing the stocks/shares directly in the market.

While the indirect financing is the type of financing when the borrower does borrows the fund via the help of intermediaries or third parties.

Hope this helps and clear things up.

Thank You.