When assessing whether credit to finance an acquisition, such as securities, antiques, or art, is primarily for business or commercial purposes rather than consumer purposes, the following factors should be considered:
A. The relationship of the borrower’s primary occupation to the acquisition: If the acquisition aligns closely with the borrower’s primary occupation, it’s more likely to be considered a business purpose.
B. The degree of personal management by the borrower: If the borrower will personally manage the acquisition, it suggests a business purpose.
C. The ratio of income from the acquisition to the borrower’s total income: A higher ratio indicates a stronger likelihood of a business purpose.
D. The size of the transaction: Larger transactions are more likely to be associated with business purposes.
E. The borrower’s statement of purpose for the loan: The borrower’s stated purpose for the loan can provide insight into whether the acquisition is intended for business or commercial purposes.
These factors collectively help assess whether the credit is primarily intended for business or commercial use rather than for personal consumption.