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Banking in Today’s Environment.
Dave OrrBanking Professional for 22 years
Expertise in Commercial Lending
Employed at West Suburban Bank
What do banks look for when evaluating your loan applications?
Earnings
Financial Condition
Management Experience
Credit History
Collateral
What do banks look for when evaluating your loan application?
Earnings
Net Income Cash Flow Available for Debt Service
What do banks look for when evaluating your loan application?
Financial Condition
Balance Sheet Analysis to support the Financial Health of the Company
What do banks look for when evaluating your loan application?
Management Experience
Resume of each owner and key management members and their industry knowledge.
What do banks look for when evaluating your loan application?
Credit History Reports from outside agencies, references, other bank customers
Evaluation of your personal credit and business credit history
3 Years Financial Statement 3 Years of Personal and Business Tax Returns Personal Financial Statement Accounts Payable and Receivables
What do banks look for when evaluating your loan application?
Collateral
List real property and other assets to be held as collateral.
What do banks look for when evaluating your loan application?
Most loans will have at least two identifiable sources of repayment:
1. Cash flow generated from profitable operations.
2. Collateral pledged to secure the loan.
3. Personal Guaranty.
Trend Analysis
Review of historical results to identify trends or patterns in performance.
Early Warning Signs
May affect your relationship with your bank and loan officer.
Examples of Early Warning Signs
Failure to provide information requested by the bank
Borrower becomes hesitant to allow lender to visit
their operations
Frequent changes in high level management
Frequent changes in accountants
Borrower who expects an immediate decision.
Examples of Early Warning Signs
Payment Delinquency
Repeat Overdrafts
Increase in Loan Requests
Tax Liens
Unusual Capital Withdrawals by Owners
Communications with Lender Ceases
Communication with your Lender is KEY.
Be honest and trust your lender. Your Lender is your partner.
Thank you.