Banks and lenders invest on a risk/reward profile, the same as every other investor. At the time finance is applied for/negotiated, any return and the underlying assumptions for that return will be tested. That includes cost of production and revenue based on commodity prices, which may change closer to finance provision Each assumption will be adjusted for the risk(s) associated with it.
The financier will want return via interest, and will weigh up whether the return is worth the risk of investment. They may even increase the interest to make it worth their while. Though globally investors and financiers are looking for yield anywhere given QE and low central bank interest rates.
You know, investment decision making. Financiers are investors, and there are many ways to get a return (equity, interest, staggered payments). Everything is up for grabs in negotiations.
AVZ Price at posting:
20.5¢ Sentiment: None Disclosure: Held