You would be surprised to know that on most commercial loans lenders only review a couple of key financial ratios. These ratios include a quick ratio, debt to equity ratio and a debt coverage ratio of some type. These ratios along with trend analysis, break even analysis and substantiating your business projections encompass most of the repayment analysis for your loan request. From these numbers bankers are able to put most of the pieces together for why your business needs the loan and how it will be able to repay the loan once it is given.
Additionally; lenders will want to review the other C's of credit to determine whether or not you have good character, credit, collateral and other conditions that may be present. Keep in mind that the financial analysis is only one of the 5 C's to credit. It is important that you accurately cover all the C's in your loan application to ensure a successful loan application. Be cautious not to short change any one segment at the expense of another.