Borrowing Basics

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.

We will discuss the following fundamentals of borrowing:

• Credit worthiness.
• Kinds of loans.
• Amount of money needed.
• Collateral.
• Loan restrictions and limitations.
• The loan application.
• Standards which the lender uses to evaluate the application.