How to borrow money from the bank?

When you bring the financial statements of your business to the bank for loan, you should know that banks are interested in some of the following issues:

- Three questions they are interested in are: (1) have you to pay?, (2) Do you pay? and (3) If you are unable to pay, why?.

Part of credit not often even read the financial statements, instead of they will put all the data into a program that calculates the index based on trading statement and balance sheet assets. And the new indexes is the deciding factor.

Some key indexes are:
- "Cashing ratio" (cash coverage ratio). This ratio is calculated by adding the net profit with depreciation (non-cash expenses) and divide by the amount of money you must pay each year if the loan application is approved.
- Ratio of debt to net assets is easy, just take the total debt divided by equity is finished. In the worst case, the bank wants to know there are tangible assets that can be liquidated to pay debts or not.

Want to get a loan, you must understand the above ratio, what they mean and how they "look nice a little bit."

In addition to the above ratio, the bank also concerned about collateral. Ensure your assets are priced as high or low depending on the quality and liquidity of them. For accounts receivable, the quality of your customer, credit rating and payment history will decide their collateral value. With the inventory depends on what it is, where, how long production and if anyone wants to buy it? It is important to ensure that the assets are highly liquid.

The decision will be the lender of last resort to many factors, both financial and non-financial, but the bank is the ratio of the first things they care about.