Magazine article American Banker

Lenders Group Develops Format to Standardize Loan Applications

Magazine article American Banker

Lenders Group Develops Format to Standardize Loan Applications

Article excerpt

A group of commercial lenders is seeking to standardize the way small businesses provide financial information for loan applications.

The purpose of the effort is twofold: to streamline the credit process for borrowers and lenders, and stem the recent erosion of financial information that small businesses have been providing to banks.

To that end, Robert Morris Associates, a trade group of commercial lenders, has developed a format for the preparation of financial statements and disclosures that banks generally need - but don't always get - to make a sound credit decision.

The idea is to spell out for the borrower at the outset of the application process exactly what kind of information the bank needs in order to make the loan.

Accelerating the Process

Up to now, the process often, has been a back-and-forth affair, which prolongs the credit process, according to bankers.

With banks now increasingly courting small-business borrowers, a streamlined credit process becomes all the more important.

"By providing this information up front, the loan decision-making process will be accelerated and creditworthy business owners will receive the funds they are seeking more quickly," said Joseph May, president of Robert Morris Associates, and adviser to the board of Citizens National Bank in Cheboygan, Mich.

Said Frank Bozick, senior vice president of Huntington National Bank in Columbus, Ohio: "It gives the bank enough information out of the chute to be responsive in a timely fashion."

|Information Package'

The 32-page booklet, containing standardized forms, questionnaires, and checklists, dubbed the "business credit information package," was developed by Robert Morris Associates in collaboration with the American Institute of Certified Public Accountants. …

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