Collateral. The liquidation of collateral – typically accounts receivable, inventory, and property, plant, and equipment – is the primary source of principal repayment if the borrower defaults. Therefore, the institution should develop policies that encourage the proper monitoring and valuation of collateral and should also establish acceptable loan-to-value ratios based on the type of collateral. As many CI lenders have learned, there can be a high risk of fraud with these types of collateral. For example, inventory and equipment can be easily moved and accounts receivable can become uncollectible. CI lenders should understand the nuances of accepting this type of collateral and have the experience to appropriately evaluate its worth and secure the banks priority lien position in the event of default. Continue reading “A CI lender should tailor the loan covenants and documentation to appropriately match the borrowers business and risk profile”
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A CI lender should tailor the loan covenants and documentation to appropriately match <a href="https://availableloan.net/loans/medical-school-loans/">availableloan.net medical school loan</a> the borrowers business and risk profile