Banking · Credit Appraisal Methods
A high-tech startup specializing in AI-driven agricultural solutions approaches a bank for a composite loan. The company lacks traditional tangible assets like land and buildings, and its primary assets consist of intellectual property. Which of the following is the most appropriate approach for the bank to appraise this request while mitigating risk?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Demand a 100 percent cash margin in the form of Fixed Deposits before processing any loan.
- 2Treat the entire requirement as a Personal Loan to the promoters to ensure their personal liability.
- 3Focus on the 'Burn Rate', 'Runway', and the 'Enterprise Value' while seeking a guarantee from CGTMSE or a similar government scheme.✓
- 4Reject the proposal immediately because there is no tangible collateral like land and buildings.
Correct answer
Focus on the 'Burn Rate', 'Runway', and the 'Enterprise Value' while seeking a guarantee from CGTMSE or a similar government scheme.
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