3. Provision for Easy Repayment
If someone borrows $2000 from you at an attractive interest rate and promises to repay it with 15% interest at the end of 12 months, the proposition on her face is a bad one. If he needs $2000 now, what assurance is there that at the end of 12 months, he’ll have it to repay him? Such a sum is not small. Does he intend to borrow from Peter to pay Paul at the end of a year? In New York City a seemingly very substantial man did just this for years and got away with it until he died. That was over two years ago and the creditors are left holding the notes.
Small payments are a reasonable requirement, and it must be demonstrated that, when all of its obligations are taken into account, the debtor can make these payments out of his income, and these obligations must be known.