Business lending is an important part of banking because it provides small to medium sized businesses the opportunity to grow quicker compared to self-financing. Lending to businesses is a lot more complicated than lending to an individual, because there are many variables that can affect the way a business develops. For example, a personal home loan has two main variables? The first is the borrower's ability to repay the loan and the second is the market value of the property. However, business is affected by supply and demand factors, the business management team, revenue, depreciation, taxes, loan interest, employee expenses, etc. Too much or too little of any one thing can be a problem? Business lending is essentially conducted in the same way as loans to individuals. Often referred to as a business credit line, these short-term financing facilities come in a number of different forms. Some of which include bills of exchange, letters of guarantee, etc.