Business loan applicants must have a reasonable amount invested in their business. This ensures that, when combined with borrowed funds, the business can operate on a sound basis.
Financial obligations are paid with cash, not 'on paper' profits. When cash outflow exceeds cash inflow for an extended period of time, a business cannot continue to operate.
Working capital is defined as the difference between current assets and current liabilities. Current assets are the most liquid of your assets.
Collateral is an additional form of security that can be used to assure a lender that you have a second source of loan repayment.
Resource management is how you handle the day-to-day affairs of your business, including how you pay your debts, collect on debts, deliver services or products to customers, and manage inventory.
U.S. Small Business Administration, 409 3rd St, SW. Washington DC 20416.