After the business loan is closed, periodic analysis is an essential step to ensure ongoing credit quality. Throughout the entire term of the loan, your credit union needs to be able to answer the following questions:
- Is cash flow from the business still adequate to cover the debt?
- Does the loan file contain current financial statements, tax returns and other necessary documents?
- Does the business have adequate insurance coverage, and is it current?
- Are the UCC filings and other collateral requirements in place and up to date?
- Is the credit union’s review, analysis and conclusion properly documented in the file?
CU Business Group offers the following services to assist credit unions in monitoring business loans after they have been funded:
CUBG’s annual reviews include an analysis of the current financial and credit information for the borrower(s) and guarantor(s). Our risk monitoring team will:
- Review recent tax returns, personal financial statements, and credit reports
- Prepare financial spreads
- Summarize key strengths and weaknesses of the loan
- Recommend a risk rating based on lending guidelines and key metrics
- Make additional recommendations as appropriate for the situation
Risk Monitoring Service:
Our risk monitoring service includes everything in the annual review, plus:
- Credit reports on borrower(s)/guarantor(s)
- Quarterly reminder notifications to collect updated information from the borrower
- Bi-annual Business Credit Tracker Reports
CUBG’s enhanced Loan Servicing provides complete outsourced servicing, including an annual review and ongoing risk monitoring on the loan.