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What factors go into the decision of evaluating a business loan application or line of credit for approval?

“Cash Flow is king”
Without the proper cash flow, a company cannot repay its loans and indeed should likely consider alternative means of financing their activities.

Character
Does the business owner possess the character that says that when things don’t go as planned that they will do all that they can to repay the loan and work with the bank?

Collateral
While MutualBank will certainly entertain “unsecured” loans, most Commercial and Business loans will have some sort of collateral tied to it.

Capacity
Does the company have the capacity to absorb the additional debt without being overly leveraged and potentially be in a position of weakness?


 

 

These questions and answers are provided for general information only and may not be completely accurate in every situation. The information provided is not legally binding on MutualBank or any of its affiliates or subsidiaries. For assistance with specific questions regarding your account(s), please contact us.

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