What does a proper loan structure accomplish for both borrower and lender?

A proper loan structure is crucial because it effectively satisfies the financial needs of the borrower while also optimizing profitability for the lender. This means that the loan is designed to meet the specific requirements and cash flow situations of the borrower, ensuring that they have the necessary capital to support their operations or projects. At the same time, the terms and conditions of the loan, such as interest rates and repayment schedules, are set in a way that allows the lender to achieve a favorable return on their investment.

When the loan structure aligns with the financial needs of the borrower, it increases the chances of successful loan repayment, as borrowers are less likely to default when they are set up for success. For the lender, a well-structured loan can also minimize potential losses and enhance profitability. This approach benefits both parties, creating a more sustainable lending relationship.

The other options do not fully capture the essence of effective loan structuring. While helping a company remain in business or aiming for timely repayments are important aspects, they do not encompass the broader financial objectives of both parties involved, particularly regarding profitability and financial satisfaction. Similarly, claiming to limit a lender's risks entirely overlooks the inherent risks involved in lending, which can never be completely eliminated.