Risk vs. reward: How should you assess new customers?

Description

Abstract: Lenders who branch out and pursue new lending opportunities need to “dial up” their due diligence procedures to ensure a prospective borrower is creditworthy. This article points out that these procedures include reviewing historical financial statements, conducting interviews, and benchmarking performance over time and against industry averages. It notes that lenders who do this analytical legwork may unearth hidden risks and liabilities.