Credit Analysis & Support

 
 

Organizations engage this service to either manage the function or to temporarily bridge gaps in staffing, handle new loan volume or jump start a new credit initiative. Outsourcing the credit underwriting function can be a cost effective approach in today’s’ economy.

Commercial loan underwriting is the process an organization undergoes in the analysis of a request for credit in which creditworthiness, income, property valuation, business revenue and property soundness are all verified by an expert. Commercial underwriting is different from residential or consumer underwriting as the analysis is based on a more complex review of the business financial condition. Not only is the borrowing entity considered but often guarantor support must be analyzed.
FRC’s methodology is a multi¬-step approach.

First, we analyze the cash flow or asset turnover whichever is appropriate for the credit request using the financial data provided. This is the most crucial component of the underwriting process, as it confirms the borrower’s ability to repay the loan. Additionally, the liquidity, level of debt, and quality of assets evidenced in the financial statements are analyzed.

After completion of the financial analysis the appropriateness of the request as to the use of the funds versus proposed repayment terms is considered. As a part of this phase compliance with lending policies is confirmed.

FRC’s also performs review of collateral offered, independently reviewing appraisal(s) for accuracy, fairness and compliance with regulatory guidance. A loan to value ratio is calculated in compliance with the insitutions’ lending policies.

FRC’s experienced personnel then carefully analyze all property reports to determine lien position.

Only after we have comfortably, objectively and thoroughly verified all of the elements listed above will FRC offer clear and accurate recommendations as to whether or not to deny the request, to grant approval or grant pre-approval with conditions on the loan.

Our business partners are able to confidently follow FRC’s recommendations based on FRC’s business acumen and experience.

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Regulatory Bulletin: August 2017

August 21st, 2017 by rfriedman