This factor alone can stall or defeat your intentions. Also, the ability to repay must be justified in your loan package. Banks want to see two sources of repayment. One will be cash flow from the business. A secondary source of repayment could be collateral.
Equity is the next point of review.
Financial institutions want to see a certain amount of equity in a business. Equity can be built up in a business through retained earnings or the injection of cash from either the owner or investors. Most banks want to see that the total liabilities or debt of a business are not more than four times the amount of equity. Therefore, if you are seeking a loan you should ensure that there is enough equity in the company to leverage the loan. Don't be misled into thinking that start-up businesses can obtain 100 percent financing through conventional or special loan programs.