The entrepreneur needs to confirm that the bank being dealt with will fund a new venture. Bankers usually require a business plan with an Executive summary, financial plan, and a repayment schedule. They usually require that the owner contribute 20 to 30 percent of the initial cost of the new venture. Note that the above mentioned bank loans have assets as the basis of the loans. Those assets serve as collateral.
Character deals with the owners' credibility and credit worthiness.
Capacity deals with the availability of necessary resources to make the venture successful. Capital deals with the owners' financial contribution and vested interest in the project. Conditions deal with the general out look of the business, the industry, and the economy as a whole. It also deals with the entrepreneurs ability to abide by the terms of the loan applied for. Private Loans Private loans include loans from friends and family.