Your brother wants to get a small loan to finance the purchase of a large batch

Question

Your brother wants to get a small loan to finance the purchase of a large batch of lemons and hire some new employees. He visits several banks, but the loan officers all laugh and say there is no way a bank will give a loan to an 18-year-old with a lemonade stand. Your brother presents detailed financial statements showing that his company has very good financial prospects, but still no bank will loan to him. You personally do not want to lend him your own money, because you want him to learn to survive in business on his own. What other measures could you or your brother use to convince the bank to lend the money?

Explanation / Answer

It is actually difficult to get a loan in such a situation but it is possible. In order to get a business loan from the bank, I will suggest my brother to prepare all the documents regarding the business which will include the proper and legal documents regarding the business registration and also the revenue it has generated till date and also the forecast of revenue that it plans to generate in the near future. I believe that even if the bank is not convinced to roll out the loan I will serve as the guarantor for the loan and this may convince the bank to roll out the loan if they get a proper guarantor in this context. I believe that the bank needs to be assured that their money is safe and will get back to them and therefore such measures need to be taken in order to be successful.

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