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Corporate And Business Lending - Coggle Diagram
Corporate And Business Lending
Purpose
-To Ensure quality growth in loan
-Maximize Shareholder Wealth
Loan Portfolio
Asset Mix and Loan Types
Diversification
Policy Formulation
Principles
Sustainability
Safety
Profitability
3 Ways out of a loan
Activate Liens over physical assets if loan not paid
borrower fully complies with the loan agreement and fully repays the loan
Target intangible assets if no physical assets
Loan Structuring
Credit Rating Agencies
Problems that can emerge during lenders development
Lack of experience
(Overreliance technology
Overqualified
(False sense of Security)
Lending assessment Methods
5 C Approach
-Character
-Collateral
-Capital
-Capacity
-Conditions
PARSER method
(P)ersonal Element
(A)mount Required
(R)epayment
(S)ecurity
(E)xperience
(R)emuneration
Lending Cycle
9 Activities
IF DEVIATE FROM PLAN
4 Actions
Importance of Financial Information
7 importance
Portfolio Management
Advance Fail
External
-Government
-Technology
-Globalization
Internal
-Poor Profit Planning
-Poor organization
-Poor Objective setting
5 C of bad credit extension
-Complacency
-Carelessness
-Poor Communication
-No contingencies
-Competition