The greater drinking water the newest guarantee, the greater attractive its on bank
It requires contrasting brand new guarantee value and gratification against the financing small print, including identifying one things otherwise discrepancies that need appeal otherwise action
– Liquidity: It means how quickly and easily new equity is going to be marketed for cash. Such as for instance, levels receivable be a little more liquid than inventory, and you may directory is more liquid than simply equipment.
– Perishability: That it identifies how long this new guarantee is also retain the really worth and you may high quality. This new quicker perishable the latest guarantee, the greater number of attractive its into bank. Eg, canned items are reduced perishable than just fresh create, and you can machines is actually less perishable than electronic devices.