Partnership
What does it mean
A partnership is a business structure where two or more individuals share ownership and management responsibilities. Each partner contributes to the business financially, operationally, or both.
Why does it matter
Partnerships are important for community bankers to understand as they assess risk and opportunities in small business lending. They need to evaluate the partnership agreement, individual partner's financial health, and shared liabilities. Understanding partnerships helps bankers tailor financial solutions and manage risks effectively.
One primary difference between a partnership and other entity types is that since a partnership is essentially a group of individuals conducting business, there is no shield of personal assets from business liability. That means if the partnership gets sued, the owner’s personal assets are at risk.
Other Relevant Terms
Want to Master Banking's Favorite Ratio?
The Debt Service Coverage Ratio (DSCR) is one of banking's favorite ratios. Want to ace it without breaking a sweat? No problem! We've got some simple, no-fuss pointers that will help you nail this ratio every time. You've got this!
Get the Cheatsheet NowNot Finding What You Are Looking For?
Let me know what terms, ratios or content you want to see covered.
Request Term or Ratio
Am I missing a key term or ratio? Let me know what you want to see covered.
Request Content
Do you have a topic idea you'd like to see covered? Send it my way.
Checkout Courses
Enhance your skills through a deeper understanding of your customers' businesses.
A bit about me
Greetings! I'm Clay Sharkey, and there is nothing I like more than assisting others in achieving their goals. I firmly believe that by enhancing a banker's understanding of their customer's' business, they can provide superior service. This superior service, in turn, leads to stronger relationships for the bank, improved performance for the businesses, and better experiences for our communities. Win-win-win.
