A colleague tells you that he can get a business loan from the bank, but the rates

Question:

A colleague tells you that he can get a business loan from the bank, but the rates seem very high for what your colleague considers a low-risk loan.
a. Give an adverse selection explanation for this, and offer advice to your friend on how to solve the problem.
b. Give a moral hazard explanation for this, and offer advice to your friend on how to solve the problem.