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.