1-Minute Wednesday: 5 Red Flags Business Lenders Watch For

Most of our clients have applied for a business loan at one time or another. Over the years, we have come to learn the red flags that lenders look for when evaluating a business loan or line of credit. I’d like to share those with you today:

  1. Consistent profitability
  2. Debt to Tangible Net Worth Ratio of less than 4 to 1
  3. Reliable, accurate and timely financial statements within 30 days of each month-end.
  4. Current Ratio (current assets to current liabilities) of at least 1.25 to 1.
  5. An honest and straightforward business owner
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