A loan is the extension of credit or funds that must be repaid. Credit risk concerns a firm's ability to make interest and principal payments on borrowings as they come due. Risk analysis using financial statement data typically examines 1. short-term liquidity risk, the near-term ability to generate cash to service working capital needs and debt service requirements, and 2. long-term solvency risk, the longer-term ability to generate cash internally or from external sources to satisfy production capacity and debt repayment needs.
Loans and credit arrangements are a fundamental part of the modern business environment. Mortgage loans are necessary in order to finance the purchase of facilities and premises for the business and to acquire additional properties for expansion and growth. Lines of credit can provide added financial stability for continued operations even during cash flow difficulties. Depending on the needs of the company, installment loans or credit loans may be used to manage the purchase of equipment and materials to produce the goods and services sold by the business. A credit loan typically provides a revolving line of credit, a financial arrangement that allows the borrower to access available funds up to a preset limit. By paying back the funds, the borrower can ensure that funds are once again available for borrowing when the immediate need for cash has been resolved. Other types of loans may be amortized; this allows the cost of the purchased item to be spread out over its entire useful life.
CNF Exchange offers a wide range of services for borrowers and lenders in arranging installment loans and credit loans more efficiently. Borrowers can submit their loan requests through the CNF Exchange interface for consideration by lenders; uploading a funding application is free and provides a number of options for borrowers. Lenders benefit by gaining access to a pool of qualified applicants looking for a commercial loan arrangement. Both parties benefit by taking advantage of the convenient, easy-to-use CNF Exchange interface to find the right lending and borrowing arrangements for their financial and investment needs.