Banks focus on a small business's ability to generate a positive cash flow when lending money.

Question

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Banks typically prioritize a small business's ability to generate sufficient cash flow to repay their loan when considering lending money. This is because cash flow is a fundamental measure of a business's financial health - it reflects the amount of cash coming in and going out and is essential for managing day-to-day operations, paying bills, and servicing debts. Having a solid cash flow ensures that a business can meet its financial commitments and avoid defaulting on its loans.

Banks Focus on a Small Business's Ability to Generate a Positive