Frederika has started an automotive repair firm with the potential for high growth. She obtains lunding for the business from a group of investors who demand partial ownership of the business and representation on the board of directors. What type of financing has Frederika procured? A. Certified Development Company (504) prog B. Venture capital C. Microloan D. SBIC capital E. SBA 7(a) loan program

## Step 1<br />The problem presents a scenario where Frederika has started an automotive repair firm with the potential for high growth. She has obtained funding for her business from a group of investors who demand partial ownership of the business and representation on the board of directors. We are asked to identify the type of financing Frederika has procured.<br /><br />## Step 2<br />The options provided are:<br />A. Certified Development Company (504) program<br />B. Venture capital<br />C. Microloan<br />D. SBIC capital<br />E. SBA 7(a) loan program<br /><br />## Step 3<br />We need to analyze each option to determine which one best fits the scenario described.<br /><br />## Step 4<br />Option A, the Certified Development Company (504) program, is a type of financing that is typically used for small businesses. However, it does not usually involve giving investors partial ownership or representation on the board of directors. Therefore, this option does not fit the scenario described.<br /><br />## Step 5<br />Option B, venture capital, is a type of financing that is typically used for businesses with high growth potential. Venture capitalists are investors who provide capital to such businesses in exchange for an equity stake. This means they become partial owners of the business and may seek representation on the board of directors. This option fits the scenario described.<br /><br />## Step 6<br />Option C, microloan, is a type of financing that is typically used for small businesses. However, it does not usually involve giving investors partial ownership or representation on the board of directors. Therefore, this option does not fit the scenario described.<br /><br />## Step 7<br />Option D, SBIC capital, is a type of financing that is typically used for small businesses. However, it does not usually involve giving investors partial ownership or representation on the board of directors. Therefore, this option does not fit the scenario described.<br /><br />## Step 8<br />Option E, the SBA 7(a) loan program, is a type of financing that is typically used for small businesses. However, it does not usually involve giving investors partial ownership or representation on the board of directors. Therefore, this option does not fit the scenario described.