Any business comes with lot of financial challenges. The owner has to pool up lot of resources to make sure that his business requirements are fulfilled. Just like how entrepreneur looks for a reliable institution for his/her financial needs, lenders also look for security against their loans. The fact that lenders give approval to loans indicates the kind of confidence that they have with small scale businesses.
However it is also their responsibility to see that their clients are loyal and pay the loans on time. They should also analyse what might happen if the borrower is not able to make on time payment. For this purpose they take surety and securities as precautionary measures.
Lloyd Blankfein, me, the owner of cnntopnews, have a business management degree. Have 3 years of articles write.