What are lenders mainly interested in?
A) The use of the money the firm has borrowed.
B) The ability of the business to create new products.
C) The wealth created by the firm.
D) The ability of the business to reimburse the money it has borrowed.

Question

Quizplus · Accepted Answer

Lenders are primarily interested in the ability of the business to repay the money borrowed. This is because lending constitutes a risk, and lenders want to minimize that risk by ensuring that the borrower has the capability of repaying the loan with interest on time. While the use of the money borrowed and the wealth created by the business are important factors, they are not as critical as the ability to reimburse the debt. The lender is not primarily concerned with the firm's ability to create new products, although a viable business plan may be necessary to secure the loan.

What Are Lenders Mainly Interested In