How do profit increases your ability of borrowing money?

[Setho]

This boils down greatly to the loaning policy which many financial institutions put in place. To them , they would be much more willing to give out loans to an established business that is growing already.

 

[Jlife]

When a business is not generating money then getting a loan to support the business is the most riskiest thing, because sometimes the business is not improving and if you continue to be in a serious debt ,that can land you in a serious situation.

 

[GIFTMICHAEL]

If your business is a lucrative one, then uncertainty hit it hard, making it go into financial degradation. The owner can still get a loan from the mortgage, or other corporate affairs that gives loan, cos their is possibility omfor the business owner to meet deadline.

 

[joy101]

If my business is doing well am also getting good profit in my business there is no need of getting any loan, because I don't like taking a loan.

 

[akinlolu99]

Most banks requests monetary records prior to loaning out large cash to entrepreneurs. The benefit and misfortune records of the entrepreneur gives the loaner clearness of installment. An organization with records of high benefits gives the loaner confirmation of installment in due time. Its vital prior to selecting advance

 

[Josemendez]

Having a good profit record is very important when borrowing loans from financial institutions. This is because it will encourage the Institutions in lending loan to the business

 

[Ralphjoe]

This is true. Most banks asks for financial records before lending out big money to business owners. The profit and loss accounts of the business owner gives the loaner clarity of payment. A company with records of high profits gives the loaner assurance of payment in due time. It’s very important before opting for loan

Yes this is what is obtainable even in my country as whenever you want to take a loan from the bank they will definitely request for your financial records so as to know the profitability of the business and then from the profitability of your business they can ascertain your loan limit for you.

 

[Justin]

lender will always analyze whether you will be able to repay the loan or not, if your business is earning a lot of profits, the lenders will be assured that you can repay in time

 

[Ralphjoe]

I think it is a good way to go. The business is making profits as it is, now wants to borrow more to capitalise, expand and grow even more, which would mean more profit. Any bank wouldn't think twice to borrow such business.

The thing is that before a bank or a credit or policy gives your business a loan it will also require some documentations to see the financial strength of your business and in one of those documentation there will always be an account that takes the profitability of your company into cognizance.

 

[Bousine123]

Have you ever crossed this thing into your mind? Seems very ironic to hear right, but it is possible. Yes having the profit increases your ability to borrow money from possible investors. Debt lending allows a corporation to repay the money loaned with interest to the borrower. Debt funding for a small corporation usually involves a bank's borrowing of capital. Profitability of a business plays a major role in lending a bank money to the company.

Besides interest, the loan value and collateral of a business owner are deciding factors in the decisions on the loan. A business which cannot make profit is generally regarded as a risk of a lender's default.

What are your thoughts about this, is it still profitable ? Please share your thoughts.

Your profits as a business owner sure does increase your ability to loan money. But I will always advice people from taking loans. It's a very wrong step to take when you know it would be difficult to pay back.

 

[Snazzy001]

The presence of profit there gives you this assurance that you can pay my loan in water collected since it is going to hear the profit that enables you to pay back with interest

 

[Thinker009]

Exactly before even banks or companies lend a business owner money they would first check the profitability of the business , if the business is fit then they might consider borrowing the business except it's not fit

 

[Jlife]

lender will always analyze whether you will be able to repay the loan or not, if your business is earning a lot of profits, the lenders will be assured that you can repay in time

What is the need to borrow money when you are already making a serious profit in your business ? it is better for you to use the profit and grow your business patiently than to get the loan in which you won't know the outcome.

 

[Hena101]

How profit can increase your ability of borrowing money is the fact that you are sure of what you are doing and this make people to borrow you money.

 

[Lens]

That's the first thing that the loan sharks consider first. They looked at how profitable the business is and your responsibilities. They will weigh this before they can choose an amount that you can borrow. Once you are qualified, then you will be issued one.

 

[Melanie Marie]

Have you ever crossed this thing into your mind? Seems very ironic to hear right, but it is possible. Yes having the profit increases your ability to borrow money from possible investors. Debt lending allows a corporation to repay the money loaned with interest to the borrower. Debt funding for a small corporation usually involves a bank's borrowing of capital. Profitability of a business plays a major role in lending a bank money to the company.

Besides interest, the loan value and collateral of a business owner are deciding factors in the decisions on the loan. A business which cannot make profit is generally regarded as a risk of a lender's default.

What are your thoughts about this, is it still profitable ? Please share your thoughts.

Sure. The better your biz is doing, the better you will look to the bank. They see you have a far better chance of paying back on the loan.
Sadly, some businesses need this loan when they experience a drop in sales just to keep their business afloat.. to possibly get more supplies/inventory, or help with rent (if renting a building to sell their items to customers.) A bank wouldn’t be so quick to lend money when they see a business is in trouble.

 

[Abigael]

I totally agree with what has been said in this thread. Indeed the profitability of a business gives the business owner an ability to take loans. This is because your credit score increases as you proof to the lender that you actually have the ability to pay back the loan.

 

[Dashpiku]

I totally agree with what has been said in this thread. Indeed the profitability of a business gives the business owner an ability to take loans. This is because your credit score increases as you proof to the lender that you actually have the ability to pay back the loan.

When profit is more, you will be able to invest more in the business. At the time I don't think anyone would require to borrow money. We only borrow money when the cash in your hand goes low.

 

[Chibson]

I think when your business is a successful business in the sense that you make a lot of profit then when you want to take loans from banks they will definitely know that you have the capacity to pay back.

 

[jeff87]

Have you ever crossed this thing into your mind? Seems very ironic to hear right, but it is possible. Yes having the profit increases your ability to borrow money from possible investors. Debt lending allows a corporation to repay the money loaned with interest to the borrower. Debt funding for a small corporation usually involves a bank's borrowing of capital. Profitability of a business plays a major role in lending a bank money to the company.

Besides interest, the loan value and collateral of a business owner are deciding factors in the decisions on the loan. A business which cannot make profit is generally regarded as a risk of a lender's default.

What are your thoughts about this, is it still profitable ? Please share your thoughts.

I think that's right when the business is more profitable then the money they can borrow should also increase. The more profitable the business means more money to pay off the loans or debts. If I were to loan my money, I will give it to people who has a greater capacity to pay me back.