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In: Finance

If you are the sole owner of a project, the lender will normally ask you for...

If you are the sole owner of a project, the lender will normally ask you for your personal ?financial data. What elements are covered in this category, and why would your lender need ?to know about your personal finances?

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Expert Solution

A lender would want to look at the personal finances of the sole owner of a project. This would cover the personal Assets of the owner and their market value. The statement of personal finances should also detail the values of other loans taken by the owner such as student loan home loan an automobile loan so that the lender can assess the debt income ratio of the owner and decide whether the loan should be given.

The lender is required to know about the owners personal finances to assess the risk taking capacity of the owner. He also need to determine the debt levels that exist so as to reduce the chances of default on the loan. In sole proprietorship and partnership form of organisations the liability of the owner is unlimited and his personal assets can be used in case there is a default on the loan. Hence this information is useful to a lender.

jeff jeffy answered 1 year ago
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