Moonworks formerly known as Moon Associates needed a financial boost at a time when there was little proof it was going to be able to return the investment. A long time financial partner with Moon Associates, BankRI’s banker Matt Weiner believed in the business plan Moon Associates put together and gave them the financial boost needed to turn the tides. There are a few requirements for small businesses to gain a line of credit; a bank account, proven financial history, and credit report (Henderson, 2015). A bank account in good standing with an average daily balance or positive monthly cash flow ensures the lender the business can repay in the event the business needs to draw off the line of credit. As small businesses …show more content…
Character takes in to account all business policies and ethical practices of the firm over the years of doing business. In many cases building a strong relationship with a bank and the people that work there will increase the odds of financial backing. Capacity relies on a business to take advantage of opportunities and make strong financial decisions on a consistent basis. A lender will see if there are reasons to distrust a business when providing funding for a given project. Capital pertains to any cash and liquid assets a business has. Showing a lender that there are sufficient means to pay off a line of credit or financial obligation quickly is favorable when lending money. Conditions take in to account all of the financial variables at the current time of lending. An economic recession will greatly reduce the amount of money borrowed by a lender as well as make the requirements of getting a loan more difficult as well. Finally collateral is an asset owned by a business or assets worth more value if sold than the loan being provided. Taking specialized equipment that a company owns and putting them on the loan allows the bank to take and sell that equipment in order to recoup most or all of the investment. In the situation with Moon Associates, BankRI and Mr. Weiner could have taken in to account character, capacity, and collateral. Since Moon Associates has banked with BankRI and Mr. Weiner from the beginning there is sufficient trust and a strong working relationship. Moon Associates has invested much of its money into a relatively small work space and produces large amounts of revenue over the years proving to the BankRI that it makes wise investment decisions. Allowing the BankRI to consume its assets if they default would be another option to guarantee financial backing in this