Someone I know has just acquired a 37-year-old corporation that has never conducted business. The owner said that a banker was begging for him to apply for credit, because of the age of the corporation. The banker said that corporation's age was the most important thing and that the lack of business didn't matter.
Can my friend really apply for an unsecured loan if the corporation has never conducted business? Would he just put $0 is the revenue section of the loan application?
While different banks have different criteria, every borrower needs to be able to demonstrate that a loan will be repaid. Zero income in the past is a poor record. Even non-profit organizations generate revenues. If the corporation had promises of showing a profit, that could help them qualify for a loan, but just because the corporation has been on record as existing is no guarantee that it can secure a loan.
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While different banks have different criteria, every borrower needs to be able to demonstrate that a loan will be repaid. Zero income in the past is a poor record. Even non-profit organizations generate revenues. If the corporation had promises of showing a profit, that could help them qualify for a loan, but just because the corporation has been on record as existing is no guarantee that it can secure a loan.
