Banker’s Ideal - NAIJAON

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Monday, July 8, 2019

Banker’s Ideal

Bankers look for an ideal loan applicant,
who typically meets these requirements:
For an existing business, a cash flow
sufficient to make the loan payments.
For a new business, an owner who has
a track record of profitably owning and
operating the same sort of business.
An owner with a sound, well-thought-
out business plan.
An owner with financial reserves
and personal collateral sufficient to
solve the unexpected problems and
fluctuations that affect all businesses.
Why does such a person need a loan,
you ask? He or she probably doesn’t,
which, of course, is the point. People
who lend money are most comfortable with people so close to their ideal loan
candidate that they don’t need to borrow.
However, to stay in business themselves,
banks and other lenders must lend out the
money deposited with them. To do this,
they must lend to at least some people
whose creditworthiness is less than perfect.

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