When considering making a loan to a company, a bank will look for:

Question

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A bank will want to see a low debt ratio (indicating that the company has manageable levels of debt) and a high current ratio (indicating that the company has enough current assets to cover its short-term liabilities). This shows that the company is in a good financial position to repay the loan. A high debt ratio or a low current ratio would be red flags for the bank.

When Considering Making a Loan to a Company, a Bank