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Evaluating The Loan Proposal - Adam Wong In evaluating the loan proposal the lender should take into account - Customer's Request - Amount of the loan - Purpose of the loan - Source of repayment - Evaluating the viability of the borrower The viability of the borrower is further dependent of the following factors: - Business Viability - Operational Efficiency - Management Quality - Stage Of Growth Of The Business - Historical & Projected Performance In evaluating the financial statements lenders should be aware of the following limitations of financial statements - impact of inflation - income recognition - revenue Vs capital expenditure - deferred expenditure - valuation methods - non-cash expenditure - intangible assets and goodwill - contingent liabilities |