Final answer:
Lenders and investors typically require collateral, a strong credit history, or a cosigner before lending money or investing in a business, with personal investments from the owner often being essential.
Step-by-step explanation:
Lenders and investors are generally reluctant to lend money or invest in a business if the owner does not provide collateral, have a good credit history, or in some cases have a cosigner. For small businesses, the individual's personal financial contribution is often pivotal as it demonstrates their commitment and also provides some initial capital. Banks and investors assess potential risks by reviewing sources of income and conducting credit checks. Additionally, angel investors may be willing to invest in companies at an early development stage in exchange for partial ownership.