Commercial Lending Review articles from July 2006

Commercial Lending Review archives from July 2006

Sustaining client relationships: commercial lender as trusted advisor: what is the connection among trust, competitive success and profitability in commercial banking?
July 1, 2006... Howard was the head of the financial services practice at a consulting firm in the 1990s. One day he received a call from his counterpart at a well-known consulting firm, a major competitor. "One of our banking clients has urgent need of a...

Net operating losses: how much are these "assets" really worth? When do NOLs provide true economic benefit?(net operating loss )
July 1, 2006... Today's bankers face the daunting challenge of valuing a variety of intangible assets when making credit decisions. Unidentifiable intangibles like goodwill and identifiable intangibles related to technology-based assets like unpatented...

Creating enforceable prepayment provisions in commercial promissory notes: protecting the lender in the case of acceleration.
July 1, 2006... In most states, a borrower does not have the right to prepay a commercial loan unless the right is expressly provided in the loan documents. If the note is silent regarding prepayment, the maker has no right to pay early. This is referred to as...

Copyrights as collateral: addressing the reversion risk: loan structure must take into account potential reversions or terminations of copyright.
July 1, 2006... Intellectual property is frequently used as collateral in lending transactions. For certain borrowers, especially those in the entertainment industry, their copyrights are among their primary assets. However, many lenders are unaware of the...

Present-value analysis of collateral-dependent loans: a discounted cash flow model for calculating loss given default.
July 1, 2006... Every loan has the possibility of partial or total default. The likelihood of a loan defaulting is a function of the borrower s ability to meet the cash flow requirement of the loan. Statement of Financial Accounting Standards (SFAS) No. 5,...

Employers' accounting for defined benefit pension and other postretirement plans: pension fund status should come out of the notes and into the main body of the financial statements, the FASB proposes.(ACCOUNTING)(Financial Accounting Standards Board)
July 1, 2006... The Financial Accounting Standards Board (FASB) recently issued an exposure draft of a proposed statement of financial accounting standards (SFAS), Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans--an amendment...

Compensating balances: a new look: a method for expressing the trade-off between compensating balances and loan rates.(LOAN PRICING)
July 1, 2006... Traditionally, demand deposits have been used as a primary source to fund bank balance sheets. Such core deposits are more stable than short-term borrowing or other volatile liabilities. As commercial non--interest-bearing accounts, they can...