Typically, bank lending is the most common form of raising money (from external sources) for entrepreneurs and small- and medium-sized business owners, who rely on traditional debt to fulfill their cash flow needs. Unfortunately, they frequently get turned down by big banks when they need capital.
Over the last few years, banks have become notoriously selective when it comes to giving companies the money they need — even those with a solid track record and strong financials. This is because banks require prospective lenders to present sizable collateral, consistent cash flow or a strong debt-to-income ratio (percentage of a company’s gross monthly income that goes into paying monthly debt payments) in order to qualify for a bank loan.
Source: Escalon Services
