Business Loan Executive Interview Questions and Answers

The process of obtaining an unsecured business loan involves application, approval, and disbursement without collateral.

• 1. Application: Business owner submits a loan application with financial documents.

• 2. Credit Assessment: Lender evaluates creditworthiness based on credit score and business history.

• 3. Documentation: Required documents may include tax returns, bank statements, and business plans.

• 4. Approval: Lender decides on the loan amount and terms based on risk assessmen...read more

ABB (Average Borrowing Balance) is calculated to assess a business's average loan balance over a specific period.

• ABB = (Beginning Balance + Ending Balance) / 2

• Example: If the beginning balance is $10,000 and the ending balance is $20,000, ABB = ($10,000 + $20,000) / 2 = $15,000.

• Consider the time period for which you are calculating ABB, such as monthly or annually.

• ABB helps in understanding the borrowing trends and managing cash flow effectively.