Why is it necessary for banks to require a guarantee before making loans available to smaller firms ?

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  • Anonymous
    4 weeks ago
    Favorite Answer

    Business default (fail, bankruptcy) every five years or less.

    The Bank wants to be as sure as possible, that they will get back the money with interest.

  • 4 weeks ago

    So that the bank doesn't lose money if the small business doesn't pay back the loan.

  • 4 weeks ago

    Wouldn't you want some assurance that you will get your money back?

  • 4 weeks ago

    It's not necessary.. it's up to what the firms credit/assets etc look like.

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  • Anonymous
    4 weeks ago

    Banks hate to lose money.

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