Back to Basics
Thomas Friedman, editorial writer for the New York Times, recently wrote “Our financial bubble, like all bubbles, has many complex strands feeding into it — called derivatives and credit-default swaps — but at heart, it is really very simple. We got away from the basics — from the fundamentals of prudent lending and borrowing, where the lender and borrower maintain some kind of personal responsibility for, and personal interest in, whether the person receiving the money can actually pay it back.”
It is time to get back to basics. Credit scoring models don’t repay loans, actual borrowers have to repay loans. As such, it is necessary to get to know the customer. Do they have the experience and knowledge to run their business, why do they need to borrow, and can the cash flow of the business support repayment.
Against this backdrop, we have created a number of courses that focus on the basics.
The course objectives will vary depending upon whether the participants need to evaluate a commercial or consumer request. The cases are tailored to the size transaction the participants will typically see and whether they evaluate financial statements and/or tax returns. These courses get participants back to basics in that they learn to truly understand the customer, understand the borrowing need and repayment source, get the appropriate information, and structure the loan accordingly.