Financing the Small Business

Some small business persons cannot understand why a lending institution refused to lend them money. Others have no trouble getting funds, but they are surprised to find strings attached to their loans. Such owner-managers full to realized that banks and other lenders have to operate by certain principles just as do other types of business. This Aid discusses the following fundamentals of borrowing: (1) credit worthiness, (2) kinds of loans, (3) amount of money needed, (4) collateral, (5) loan restrictions …

…grant or refuse the loan. The SBA loan processor looks for: (1) The borrower's debt paying record to suppliers, banks, home mortgage holders, and other creditors. (2) The ratio of the borrower's debt to net worth. (3) The past earnings of the company. (4) The value and condition of the collateral which the borrower offers for security. The SBA loan processor also looks for: (1) the borrower's management ability, (2) the borrower's character, and (3) the future prospects of the borrower's business