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A corporate loan applicant growing cash flow account for the last three years but cashflow from...

A corporate loan applicant growing cash flow account for the last three years but cashflow from operations has been negative. Would this be a concern to the Loan officer approving the loan? Why or why not?

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Answer is Yes

when any corporate loan applicant is going to take loan then he/she has to submitted many documents but in those documents the main thing is Cash flow statement which shows Earnings from 3 Kind of activities ( Operating, Financing and Investing).

loan officer would concerned for approving the loan as because main source of returning the amount is income earned from Operation which shows the strength of business activities. Negative income from Operation shows that they have loss in their daily activities and they are not able to repay the loan by their operations .

so it might get affected for granting loan by the loan office.

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