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How do big banks determine a maximum loan for a businesses?

How do big banks determine a maximum loan for a businesses?
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Answer #1

Big banks have a lot of criteria to sanction the required amout of loan to be disbursed.
One of them is revenue. The banks go through their income statement to see how much profit they have earned. Second is time in business, how long the business has been running. Third is industry type- which type of industry the business specialises in. Then fourth, the credit score of the owner. A poor credit history can make him pay high interest rate or a low loan amount. Fifth, banks also consider Debt to income ratio generally 36% or less before deciding the loan amount.

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