An Outline of the Credit Application, Analysis, and Approval Process: The Centrality of Credit Analysis

David Munro

Chapter 4 in A Guide to SME Financing, 2013, pp 32-47 from Palgrave Macmillan

Abstract: Abstract The proposed application, analysis, and approval process is outlined in its entirety. The importance of retaining a strong credit analysis base is underlined by comments on the abandonment of credit risk analysis by banks during the mortgage boom leading to the global financial meltdown of 2008. The case study introduced in Chapter 3 is expanded, with a description of how to make financial projections covering the life of the loan. Credit scoring and psychological profiling are discussed. The need for outside evaluation of fixed assets is explained as well as the requirement for one site visit. The process is framed within the context of the “Five C’s of Credit.”

Keywords: Balance Sheet; Site Visit; Credit Default Swap; Leverage Ratio; Income Statement (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-37378-6_5

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DOI: 10.1057/9781137373786_5

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