Final answer:
Business bankers can consider startup companies for loans as they often need significant borrowing, but the suitability of a loan depends on the bank's ability to monitor and customize it to a firm's needs.
Step-by-step explanation:
The question posed is whether business bankers should identify startup companies to lend to because they have a high need to borrow. While it is true that startups often have significant borrowing needs, lending decisions are typically more nuanced. Bank borrowing is generally more suitable for relatively small firms, as banks can offer customized loans and closely monitor the firm's sales and expenses through accounts.
Larger, well-known firms may prefer to issue bonds to raise capital, facilitating larger sums for investments, refinancing, or acquisitions. Yet, this is not a strict rule, and occasionally, smaller firms issue bonds, and consortiums of banks provide substantial loans. Additionally, startup financing often begins with the business owners' personal funds or with investment from angel investors, who contribute capital during the early stages of a company.