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If you are a new small business owner looking for a loan, a bank will most likely expect you to: find equity investors to spread the bank's risk. legally incorporate in that state in order to maximize cash flow. personally guarantee that you will be responsible for the business loan. legally incorporate in order to avoid taxation.

User Irobotxx
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2 Answers

4 votes

Answer:

the correct choice is C:

Any business looking for a loan must be responsible for the same.

Step-by-step explanation:

This principle is entrenched in the principles of Credit.

Traditionally, there are 5 Cs which govern credit analysis and flow of funds to businesses:

  1. character
  2. capacity
  3. condition
  4. capital and
  5. collateral

The requirement for collateral indirectly places a demand for the business owner to take responsibility for the funds.

Cheers!

User Michele Mariotti
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2 votes

Answer:

personally guarantee that you will be responsible for the business loan

Step-by-step explanation:

personal guarantee will help the business owner get approved for a loan. If the business fails the bank can go after the business owners personal assets or property. To get this loan the business owner makes the guarantee promising to pay for business debts using his or her personal asset, which might include cash, real estate, assets or investments.

User Ishan Dutta
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4.0k points