Friday, 11 May 2012

IS YOUR FIRM CREDIT WORTHY?


Obtaining money when you need it is as necessary to the operation of your business as a good location or an adequate labor force. Before a bank will lend you money, the loan officer must feel satisfied with the answers to the following questions.

            -          What is your character -- will you want to repay the loan?

            -          How capable are you in managing the business -- will you be able to repay the loan?

            -          What is the specific purpose of the loan? Is it a short‑ or long‑term need?

            -          Do you have a clear financial plan and forecast showing why you need the loan and how you will pay it back?

            -          Is the loan request large enough to cover any unexpected change in your situation, but not so large that its repayment will be a heavy burden?

            -          What is the general economic outlook for your business and industry?

            -          Do you have a reasonable amount at stake in the business?

            -          What collateral is available to secure the loan amount?

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