9. A long time 50-year-old retail customer of a bank (credit cards, car loans & a home mortgage all satisfactorily handled) approaches the bank to request a $150K loan to fund 100% of the costs of launch a new business venture (a restaurant). The customer was employed in the restaurant supply sector for 20 years but lost his job due to a downsizing. He previously owned and operated a restaurant for 2 years. He offers security of his personal guarantee and pledge of the restaurant assets (NRV = $60K). He and wife have PNW of $560K, including a $300K residence with a $60K mortgage from your bank. Your credit hypothesis would be: * Decline; too risky a sector & start- ups have no proven track record Offer $150K secured by restaurant assets ($60K) and pledge of $90K in liquid assets (cash, stocks, bonds etc.) Offer a $100K 5-year term loan based upon i) $65K equity infused into the business as owner's capital (bank will lend); ii) pledge of restaurant assets ($50K value) plus 2nd mortgage on home for loans; iii) pledge of key-person life insurance & iv) satisfactory business plan, including cash flow projections O Approve $150K based obtaining 2 guarantees (husband and wife) secured by 2nd mortgage on the home