BUISENESS MANAGEMENT
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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make a substantial deposit in the bank
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provide collateral even if the loan is very small with low risk
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provide financial evidence to show that the loan can be repaid
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show that all the business’s cash has been used
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Detailed explanation-1: -Your income and employment history are good indicators of your ability to repay outstanding debt. Income amount, stability, and type of income may all be considered. The ratio of your current and any new debt as compared to your before-tax income, known as debt-to-income ratio (DTI), may be evaluated.
Detailed explanation-2: -Applicants with a clean bank statement including a positive cash balance, regular deposits and no overdraft several months before the loan application deserve loan approval.
Detailed explanation-3: -Character: From your credit history, a lender may decide whether you possess the honesty and reliability to repay a debt. Considerations may include: Have you used credit before? Do you pay your bills on time?
Detailed explanation-4: -To evaluate capacity, or your ability to repay a loan, lenders look at revenue, expenses, cash flow and repayment timing in your business plan. They also look at your business and personal credit reports, as well as credit scores from credit bureaus such as Equifax, Experian and TransUnion.