Commercial Lending Review articles from May 2005

Commercial Lending Review archives from May 2005

Evaluating business risks in the commercial lending decision: understanding how borrowers manage their business risks can provide lenders with significant insight into their customers' credit quality.
May 1, 2005... Understanding the many risks associated with a commercial lending customer has never been more important. While bankers are quite familiar with the hazards of credit risk, and the related tools and techniques needed to assess and manage it in...

Negotiating and documenting permitted acquisitions facilities: credit agreements commonly prohibit asset and stock acquisitions. For borrowers that want the flexibility to make acquisitions, a specific carve-out for permitted acquisitions must be negotiated.
May 1, 2005... In the structuring of commercial credit facilities, negotiations regarding "permitted acquisitions"--the terms and conditions under which a borrower may acquire another business subject to only limited or even no lender approval rights--often...

Agency law and commercial lending: creating an enforceable security interest: make sure the borrower's agent has the authority to bind the principal.
May 1, 2005... Agency law is critical to lending. Any time a loan is made to a nonpersonal entity (for example, a corporation or limited liability company, etc.), an agent's signature appears on the note and other loan documents. Even though the agent's...

NOLs: the policy conflicts created by trading orders: creditors should seek reevaluation of trading orders as bankruptcy cases proceed.
May 1, 2005... Once again, the U.S. Bankruptcy Court has become the battleground for a clash between two fundamental public policies: the Bankruptcy Code's policy of protecting the assets of a debtor's estate and the market principles of the free flow of...

Technology initiatives to support middle-market lending: middle-market lenders seek tighter integration among existing systems.(TECHNOLOGY TRENDS)
May 1, 2005... Driven primarily by a dramatic increase in competition coupled with increased regulatory pressure, today's commercial bankers are recognizing the need for better and more integrated systems. A dramatic transformation looms in commercial...

What drives C&I credit quality? The degree to which banks tighten or loosen underwriting standards depends on factors including the risks perceived in the economy, the level of competition for C&I loan business and their tolerance for risk.(CREDIT OUTLOOK)
May 1, 2005... The last two credit cycles have been a roller-coaster ride for commercial and industrial (C&I) loan performance statistics. The C&I loan charge-off rate for all Federal Deposit Insurance Corporation (FDIC)-insured institutions has oscillated...

Looking for trouble before it's too late: read the corporate tea leaves for signs of pending decline.(CREDIT MANAGEMENT)
May 1, 2005... A common frustration among professionals working with troubled companies is that outcomes could often be improved if the company and its key constituents confronted problems sooner. When financial resources are dwindling, meaningful solutions...

Making the business case for the e-financial supply chain: automated solutions allow buyers to pay earlier and eliminate the secondary effects of slow payment.(PAYMENTS)
May 1, 2005... Most mid-size and large corporations agree that they will not be shuffling paper invoices and checks back and forth in 10 years but rather will be exchanging electronic files and making electronic fund transfers. Today, however, the paper...