Discussion Assignment Example | Topics and Well Written Essays - 250 words - 30

Discussion - Assignment ExampleThe main question is whether the borrower will be able to repay the debt. There are m any(prenominal) financial measures that can be used to establish a borrowers capacity including liquidity and debt ratios (Graham and Smart 56). The third aspect is capital. The lender takes into consideration any capital the borrower contributes towards the investment. This is owing to the fact that a larger contribution reduces chances of default. The fourth element is collateral. Borrowers may apply for credit cards, lines of credit or loans that secured or unsecured. Secured products including a home equity loan or an auto is considered as collateral (Graham and Smart 56). The value of the collateral is determined and plays an important role in change decisions. Finally, the conditions including interest rates, principal play a huge part in lending decisions.Mail float contributes to the time delay between when a ill-tempered payment is made and when it is recei ved and leads to a delay in the cash collection process. Processing float refers to the time between the recipe of a specialised payment into a companys account and results into a holdup in the cash collection process (Graham and Smart 523). Finally, the availability float is defined as the time between when the payment is received and deposited into a companys account and more time is taken in cash