Thought Experiment: Cash Flow and Which Customers Banks Are Willing to Lend Money To

2026-02-06 15:03:16

Is cash flow easier to borrow against than assets or even cash itself?
For example, can the total amount borrowed against a 1 million yuan asset be less than what can be borrowed from a stable, assured cash flow of 100,000 yuan per year for 10 years?
A thought experiment:
Suppose there exists a way to convert 1 million yuan worth of assets (or even more aggressively, cash itself) into a stable, assured cash flow of 100,000 yuan per year for 10 years—this doesn’t actually increase the total amount, and even with inflation included, it might be less. Would banks then be willing to lend more money?

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.