Borrowers often provide bankers with forecasts and budgets. It’s especially common when they’re asking for additional money to start or expand business operations — or when they’ve been experiencing financial distress. But how much can you trust estimates that are prepared in-house?
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Topics: Commercial Lenders, Commercial Lending, forecasts, Uncategorized
When Mark, an experienced banker, received the 2015 year-end financial statements for Amped Up, an electrical subcontractor, he felt like something wasn’t quite right. Inventory had grown substantially over the last three years and the company’s profit margin had deteriorated. Additionally, the borrower had nearly maxed out its $1 million line of credit.
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Topics: agreed upon procedures, Commercial Lenders, Commercial Lending, Uncategorized
Bankers may be indirectly affected by the new rules for IRS audits of partnerships and limited liability companies (LLCs) that are treated as partnerships for tax purposes. (For simplicity, we use the term “partnership” in this article to refer to partnerships and LLCs that are treated as partnerships for tax purposes. The term “partner” will be used to refer to an owner of either of these entities.) Here’s a brief summary of how the federal partnership audit rules have recently changed.
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Topics: Commercial Lenders, Commercial Lending, Partnership Audits, Uncategorized
From afar, the commercial lending process may appear comical. On one side of the desk you have the lenders, who want to manage their risk by loaning money to only successful business owners. On the other side of the desk, you have the business owners — many of whom believe they can’t truly become successful until they get the money!
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Topics: Commercial Lenders, Commercial Lending, Financials, Loans, Uncategorized