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