By Victor Kavlotsky


Money borrowed to purchase automobiles or auto loans is unsecured except by the value of the asset. They are repaid based on the integrity and ability of an enterprise taking the loan. If the loan is borrowed by a company, their management and their financial records is the determiner of the amount they are granted and the time they are given to repay their debt.

Today, competition among business enterprises is the main challenge faced by new enterprises. Each business is always looking out on opportunities to venture in, and increase the margins of their income. This way, new enterprises venturing the market end up following a wrong path where the market is flocked.

Additionally, globalization has improved the system by empowering enterprises with information and advancing them technologically. In addition to this, identifying risks in an organization is extremely crucial as it increases the effectiveness of the management.

Using a basic ERM model, an enterprise can identify multiple responses to the various risks and choose the best response for each risk. This would be achieved by calculating the net benefit of the risk response. A positive net benefit implies that the response is recommendable since the response is more than the associated costs.

When an enterprise gets a positive net benefit, it implies that their risks cannot affect the business. Therefore, it qualifies for a loan. Moreover, this should be considered by organizations before extenuating the risks identified. Commitment is particularly vital for small businesses. This is because of challenges encountered, one of them being the establishment of the business.

As the competition becomes stiffer, organizations are searching for better strategies to replace their management systems. Increasing the quality of management helps in improving competitiveness and therefore improves the performance. This helps to assure the lending body that the borrower is worth to invest in and to approve auto loans.




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