Clocking customers’ growth – Watch out for expansion that can veer out of control
Abstract: When a loan customer’s business is booming, it’s easy to be enamored by the outward signs of prosperity. But there could be underlying patterns of risky behavior that spell trouble. This article uses a hypothetical example to show how rapid growth can be decelerated to a more sustainable rate before a borrower careens out of control. When a lender keeps an eye on the borrower’s debt-equity ratio and profit margins, it can put the brakes on lending if the time is right.