Correct Response: B. When applying for a loan to start up a new business, the lenders first ask why the money is needed, what the money will be used for, and what assets will be purchased. This information is included in the business plan. Lenders would be very reluctant to provide more money than is needed, since this would indicate poor planning and a poor use of capital (A). Loan requests need be to be concise and explicit. Providing technical details about products would be too specific and would only be supplied upon request (C). It is essential that there is trust between business owners and lenders. Lenders expect full disclosure of any potential risks. Withholding information would weaken the trust between the entrepreneur and the lender and would severely jeopardize the issuance of a loan (D).
