Journal of Commercial Lending

Articles from Vol. 77, No. 8, April

Accounting by Creditors for Impaired Loans
Background In the past, some creditors have recognized the impairment of a loan only when the undiscounted expected future cash inflows were less than the net carrying amount of the loan. Other creditors recognized a loan as impaired when discounted...
Five Steps to Successful Public Speaking
It is a simply worded and brief statement. More often than not, it is delivered with a grin, and there might even be some warmth thrown in. Yet it is one of the most feared phrases in the English language: "I would like you to give a speech at (day,...
Here We Go Again?
Regulators and bankers alike are raising warning flags that banks are increasing credit risk exposure unduly, just at a time when an emerging economic downturn would make such exposure dangerous and damaging. There is substantial anecdotal evidence that...
How Fossil Fuels Failed Filling Fixed-Price Contracts
Ancient History Big Bucks Bank had a long-standing relationship with Fossil Fuels, Inc., and its experience was entirely satisfactory. Information in the credit file indicated that Fossil Fuels was a marketer - a buyer and seller - of natural gas, and...
How to Use a Customer-Focused Quality Program to Improve the Loan Approval Process
You may think your customers are satisfied with your loan approval process, but do you know this to be true? Do you wonder what customers and loan officers would say if you asked them about the bank's loan approval process? Have you systematically reviewed...
Managing the Credit Risk of Interest Rate Swaps
The derivatives market has mushroomed in the recent past. The International Swaps and Derivatives Association (ISDA) estimated that interest rate swaps by end users had grown from $476 billion in 1985 to $3,209 billion in 1993. In the U.S., end-user...
The Art of Making Financial Statement Projections: A Six-Step Visual Model
Financial statement projections are perhaps the most important, but least understood, element of commercial lending. For the banker, it is not the business' track record and historical cash flow that determine loan repayment but future events and future...