Why would lenders want to see that a business already has some level of capitalization before giving it access to more capital by means of a loan?

Microeconomics
13th Edition
ISBN:9781337617406
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter16: Interest, Rent, And Profit
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Why would lenders want to see that a business already has some level of capitalization before giving it access to more capital by means of a loan?

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