In general, why are commercial banks reluctant to loan money to start-ups? Read the following
scenario and answer the question asked at the end
Arslan Jamil just returned from a meeting with his banker with a frustrated look on
his face. He tosses his keys on the kitchen counter and tells his wife, “I just can’t
understand where my banker is coming from. I have a great idea for a new firm, but
the bank isn’t interested in helping me with a loan. Tomorrow, I’m going to visit a
couple of other banks to see if I have better luck.” Do you think Arslan will have any better luck with the second and third banks he visits? Why or why not?
scenario and answer the question asked at the end
Arslan Jamil just returned from a meeting with his banker with a frustrated look on
his face. He tosses his keys on the kitchen counter and tells his wife, “I just can’t
understand where my banker is coming from. I have a great idea for a new firm, but
the bank isn’t interested in helping me with a loan. Tomorrow, I’m going to visit a
couple of other banks to see if I have better luck.” Do you think Arslan will have any better luck with the second and third banks he visits? Why or why not?
