2022-11-11 Trust and lending (cores of long term value added)

Lending brings the ability to adjust medium to long term utility of the service or product with the cash-flow from that service of product. It builds the following types of trust:

a) borrower is able to identify asset or service that will bring the expected utility (value added)

b) borrower will always keep the willingness to keep the part of cash-flow back to lender

c) lender does have capacity to hold the loan and adjust to managable risks

d) borrower focuses on the purchase price of the asset and utility before he decides to go for funding

e) asset/service is interchangeable between different customers (at least in some way)

f) cost of capital is critical on long term and medium term projects

g) extrnal factors unknown in beginning are reasonably managable

Taking all above the points brings the perfect world for the economy to grow. And the ideas and investment opportunities to finds its place.