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Any Corporate Loan will be sanctioned basing on the purpose of the loan. Such as Working Capital Loan, Machinery Loan, Vehicle Loan and Business Development Loan etc.
While considering any loan proposal, the Capiatal in the business is also one of the points to be considered, but the Capital Amount is not the only creteria to consider any proposal as such.
If the purpose of the loan is productive (which generate profits to the company and which business is legal), then the banker will ask for a project report for the said purpose and study the implications and viability of the project.
Depending on the soundness of the proposal and its viability the banker considers the sanction of the loan guided by the rules of the bank and guidelines of credit given by RBI (Reserve Bank Of India) from time to time.
Sometimes the loan quantum may be more than the Capital of the company also depending on the pupose of the loan and cost of the project proposed.

2007-03-22 04:09:52 · answer #1 · answered by arpita 3 · 0 0

General principle is that of 2:1 for debt equity ratio. But plentiful exceptions prevail on the merits of each case. These exceptions could be statutory, industry-sector wise, commercial or others.

2007-03-22 00:00:55 · answer #2 · answered by helpaneed 7 · 0 0

if you grease their palms,you can what ever amount you require.

2007-03-21 22:47:05 · answer #3 · answered by yuvraj S 2 · 0 1

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