Head Off Concentration Risk at the Pass

Concentration risk is a financial risk that comes into play when a borrower relies too heavily on one, or one set of, suppliers or customers, making the business vulnerable if those key suppliers or customers fail. Lenders need to identify these risks and help borrowers minimize the negative effects the risks might have on business performance. This article explains several types of risks, how to assess them, and points out the measures a lender may need to take to offset the risk, or even deny the loan until remedial measures are taken.

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Site Visits Can Take You Beyond the Numbers

Financial statements, strategic plans and other financial documents provide essential information about the health and prospects of borrowers’ businesses, but to really understand a company’s operations, a lender needs to see what’s happening first-hand. This article shows how site visits can provide essential information about borrowers and help lenders detect problems before distress symptoms appear.

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What to Consider When Lending to a Franchisee

Some franchisors offer financing, but first-time franchisees often find themselves in need of traditional bank loans. And it’s not just new franchisees that need access to capital. Established ones frequently need funds to purchase new equipment, remodel their locations and meet short-term cash crunches. This article explains how to evaluate these types of loan applications.

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