CLR
Showing 81–96 of 345 results
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4 hidden costs entrepreneurs omit from their forecasts
August / September 2018
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 439
Abstract: When entrepreneurs prepare financial forecasts for their business plans, they sometimes overlook costs that might have the potential to derail their business. That’s particularly problematic if a bank relies on a forecast during the initial underwriting process or on an ongoing basis to justify increases in a start-up borrower’s debt. This article suggests four costs entrepreneurs tend to leave out or miscalculate.
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Head off concentration risk at the pass
August / September 2018
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 635
Abstract: Concentration risk is a financial risk that comes into play when a borrower relies too heavily on one, or one set of, suppliers or customers — making the business vulnerable if those “key” suppliers or customers fail. Lenders need to identify these risks and help borrowers find ways to minimize the negative effects the risks might have on business performance. This article explains several types of risks and how to assess them. The article points out that a lender may need to adjust interest rates or take other measures to offset the risk, or even deny the loan until remedial measures are taken.
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Being there – Site visits can take you beyond the numbers
August / September 2018
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 654
Abstract: Financial statements, strategic plans and other financial documents provide essential information about the health and prospects of borrowers’ businesses, but to really understand a company’s operations, a lender needs to see what’s happening first-hand. This article shows how site visits can provide essential information about borrowers and help lenders detect problems before distress symptoms appear on their customers’ year-end financial statements.
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What to consider when lending to a franchisee
August / September 2018
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 747
Abstract: Some franchisors offer financing, but first-time franchisees often find themselves in need of traditional bank loans. And it’s not just new franchisees that need access to capital. Established ones frequently need funds to purchase new equipment, remodel their locations and meet short-term cash crunches. This article explains how to evaluate these types of loan applications. A sidebar discusses the importance of establishing a relationship with the franchisor to increase the bank’s exposure to franchise-related lending.
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Is your commercial customer involved in money laundering?
June / July 2018
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 378
Abstract: It often falls to loan officers, who have an in-depth understanding of customer relationships, to flag potential transactions that might indicate money laundering. This article discusses the three steps of the money laundering process and lists some red flags lenders should watch for in determining whether a potentially criminal act might be occurring. Warning signs include an unplanned loan pay-down or payoff, with no apparent business reason or explanation, and reluctance to provide the purpose of the loan or how the loan proceeds are being used.
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The ABCs of appraisal for lenders
June / July 2018
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 730
Abstract: The value of property fluctuates over time, which makes it difficult to know the worth of the assets borrowers have pledged at any given point. This article points out that engaging an appraisal professional to provide ongoing formal appraisal reports can help lenders stay up to date on the current market value of their loans’ collateral.
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Financial statement reporting: Understand the distinctions
June / July 2018
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 683
Abstract: It’s important for lenders to understand the distinctions between accounting standards and be able to recognize when — and why — borrowers choose to use different reporting systems for their financial statements. This article explains the differences between Generally Accepted Accounting Principles (GAAP) and tax-basis reporting, noting that both are valid and the decision of how to report financial information depends on a business’s specific characteristics.
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Lending to formerly bankrupt entrepreneurs
June / July 2018
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 829
Abstract: An entrepreneur’s bankruptcy may overshadow years, or even decades, of prudent financial behavior. When does it make sense to lend to a formerly bankrupt individual or business? This article offers some guidance on how to determine whether the entrepreneur is a good risk, including the importance of broadening the investigation to gain an appreciation of the entrepreneur’s track record both pre- and post-bankruptcy. The article notes that, even if a lender decides not to approve a loan, the entrepreneur’s circumstances, as well as the bank’s loan guidelines, might change and allow for an approval at some point in the future. A sidebar notes the different types of bankruptcy protections.
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Helping women-owned businesses thrive
April / May 2018
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 415
Abstract: Unfortunately, some women-owned businesses still struggle to secure access to investment capital — or to secure it at loan terms as favorable as men-owned businesses are receiving. This article offers some advice for lenders on how they can add more female entrepreneurs to their loan portfolios. It suggests that understanding the unique financing challenges women-owned businesses may face is key — and can help lenders create profitable, long-term lending relationships that benefit both their banks and women-owned businesses.
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How do you determine loan prices? Loan-pricing models are key
April / May 2018
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 655
Abstract: Competitiveness with other banks is an important issue in determining loan prices, but failing to account for such factors as desired return, cost, risk and credit profile can drastically reduce a lender’s competitive advantage. A better way to set loan prices is to conduct a thorough, objective analysis using a loan-pricing model. This article discusses the benefits of loan-pricing models and suggests that using them can help lenders attract and retain customers with the highest credit quality.
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What goes up must come down – Stay ahead of the curve
April / May 2018
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 648
Abstract: With strong real estate markets in many parts of the country, lenders might feel they’re sitting pretty. But markets are cyclical. Lenders need to prepare for the next economic slump. Weathering an economic downturn requires a plan. Yet waiting until the economy slows to develop one can lead to hasty, uninformed decisions. This article offers advice on developing criteria for evaluating loans, tracking customers’ banking activity and reviewing the exit process.
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A review of the new tax law: What lenders should know
April / May 2018
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 852
Abstract: The Tax Cuts and Jobs Act (TCJA) passed in late 2017 with significant implications for businesses. Lenders need to be aware of these changes and understand the potential ramifications for their borrowers — both positive and negative — so that they can help customers take full advantage of any new tax breaks and minimize the adverse effects of provisions that will generate additional revenue for the IRS. This article provides a review of some of the most relevant provisions. A sidebar lists several additional business-related tax changes borrowers may want to consider.
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Seize the opportunity – Lending to e-commerce companies
February / March 2018
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 405
Abstract: E-commerce companies that need capital for working capital and fixed asset purchases have historically turned to alternative online lenders. But online nontraditional lenders can saddle these companies with onerous terms and high interest rates. This article notes that, before adding e-commerce borrowers to their loan portfolios, traditional lenders need to recognize how their business models differ and adjust their underwriting processes accordingly.
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Due diligence matters
February / March 2018
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 582
Abstract: Thorough due diligence requires looking closely and deeply at all aspects of a company’s operations, from applicable economic and industry conditions to sources of collateral and business operations — and beyond. This article explains that strategies such as researching industry risks and devising a risk scorecard for each borrower can help lenders accurately evaluate borrowers’ financial status and minimize the risks of delayed payments and default.
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Don’t take receivables at face value
February / March 2018
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 633
Abstract: Borrowers often use accounts receivable as collateral for their loans. But it’s important to ensure that a borrower’s receivables are truly collectible amounts. This article suggests some warning signs that may indicate accounts receivable weaknesses — or even fraud. It points out that it’s a good idea for a lender to engage a professional with accounting expertise to support due diligence by performing financial statement audits and other procedures to verify the numbers.
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Mastermind groups: A lender’s secret weapon
February / March 2018
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 854
Abstract: A small business “mastermind group” brings together lenders, CPAs, entrepreneurs and executives from a variety of industries and companies in a supportive environment that encourages openly sharing information and best practices to promote accountability and business growth. This article offers some tips for creating a successful group, including establishing ground rules, using social media to connect the group and documenting lessons learned. The article suggests that a well-run mastermind group could prove valuable in developing long-term, mutually beneficial banking relationships. A sidebar offers six questions to help generate an active discussion.