3 ms·

I don't understand how it would be similar to VC. What is the upside for the bank?

• akrai 7y ago
  The bank would be paid interest on the loan. By VC I was just trying to put it in analogous terms. Basically, rather than judging whether the loan will be paid off based on the company’s past income/assets/etc the lender tries to determine whether it would be paid off by judging the company’s future chances of success.