Final answer:
Conventional lenders, whether private or government entities, do not provide unlimited funds to entrepreneurs. They enforce measures like credit checks, collateral requirements, and possibly requiring cosigners to mitigate their risk.
Step-by-step explanation:
Entrepreneurs must understand that no conventional lending source, whether private or government, will provide unlimited funds. These institutions typically require the borrower to fill out forms regarding sources of income, conduct a credit check, potentially require a cosigner who would be responsible if the original borrower defaults, and often ask for collateral that could be seized if the loan is not repaid. The fact is, whether dealing with banks or investors, financial relationships are premised on trust and risk assessment, which includes considering the borrower’s ability to repay the loan.