Final Review Request

Understanding the Strength of the File

Understanding the Strength of the File

• Verifying ownership• Completeness of Loan package- ensure that all

documents are complete• Commitment and Collateral- how is it measured?• Character of the Applicant-how is it measured?• Loan Officer recommendation summary

Verifying Ownership

Ownership • Loan Processor must review the business DBA/ articles of

incorporation/partnership agreement as soon as he/she receives it to make sure that the borrowers listed in the application are the right people that should be applying for the loan.

• Do we Need to Add or switch Borrower(s)?

• Correct Business Name?• Sole-Proprietorships: • Partnerships:• Corporations• Non-profit organizations

Completeness of Loan Package

Ensure that all documents are complete:

• Review the Required Documents

• Address Questions that may arise regarding the documentation.

• Recommend to start a list of issues you may find and address with customer at once

• Update the system

• Identify issues in the Loan officer Recommendation

Credit Assessment

Credit:• Tier- Underwriting Grid• How it relates to the income• Reference for character assessment-

• What type of account (s) are the unpaid items?• Amounts in collections and write offs.• Has made any payment arrangements?

• Question the reason for the negative information.• Red Flags- Different Names and addresses, credit

inquiries

Collateral Assessment

Collateral is often used to leverage of the loan request and the stability of the Collateral may affect other components of the loan application decision.

• Strength of the assets available as collateral.

• Valuation Policy versus Strength of Collateral

Collateral Review

Loan Processor Role:

• Formal Detail Description Entered in MMS

• Supporting Ownership Documents Needed

• Value Verification

Commitment Assessment

Measure Commitment• Commitment can be measured with the collateral

the applicant is willing to offer to secure the loan request.

• Commitment is also measured with the personal injection

• Does the business owner re-invest the business profits? Or, do they take all profits home and de-capitalize the business?

Character Assessment

Character of the Applicant:

• Do they have a clear idea how the loan will be repaid if the business does not succeed?

• Applicant has a strong knowledge of the business• Applicant’s W2s and Tax returns match or exceed what

was stated on the loan application.• Applicant came up with the collateral agreed to provide.• Applicant provided all pertinent information• Applicant does not blame others shortcomings• Applicant obeys laws-files tax return• Applicant is patient with reasonable loan processing time

Loan Officer Role

• Confirm that RDL is complete• Review documents to identify any issues, trends,

questions, etc.• Recommend to start a list of issues you may find

and address with customer at once• At the end of your review and before you start

writing your loan recommendation ask yourself:

• DO I KNOW AND UNDERSTAND THIS BUSINESS?

Loan Officer Recommendation

• Capacity, Credit, and Collateral

• Only Information needed to understand and clarify issues identified during RDL review.

• Add information about personal income sources• What you know about the business that we may not

capture from the documents in MMS

Loan Officer Recommendation

• Character & Commitment Assessment

• Your relationship with applicant during the application process

• Your experience during collateral inspection• Your assessment of the commitment toward the

business and to repay the loan.

Tips to PERSONALIZE your recommendation

• Who are the borrowers? What is their relation to the business? What is their experience in the industry? 

• Why should we lend money to this client?

• What are the sources of income (sources of repayment)?

• What are the loan proceeds being used for? *Be Specific