Outline four factors that the bank would take into account when deciding on whether to grant a loan to Anita and Mark - Leaving Cert Business - Question A - 2006
Question A
Outline four factors that the bank would take into account when deciding on whether to grant a loan to Anita and Mark.
(20 marks)
Worked Solution & Example Answer:Outline four factors that the bank would take into account when deciding on whether to grant a loan to Anita and Mark - Leaving Cert Business - Question A - 2006
Step 1
Ability to repay
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Answer
The bank will assess Anita and Mark's financial history and current income to determine if they can comfortably make repayments on the loan.
Step 2
Credit Rating/History
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Answer
The bank will check their credit history to ensure they have a good track record of managing debt and making repayments on time.
Step 3
Details of Owners' Management
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Answer
The bank will consider the experience and qualifications of Anita and Mark as owners and managers of the business, which can impact the success of the loan repayment.
Step 4
Profitability
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Answer
The bank will review the profitability of the current business to ensure it generates enough revenue to support additional loans and repayments.
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