Articles & News About Your Credit

Business Owners Vs. Bankers: Industry Expert Predicts Bankers Pass Along Pain and Hassle of Coping with the Credit Crunch

Bloomington, MN (PRWEB) January 12, 2008 -- Business owners should expect some new hassles associated with their bank loans. Don't think that just because the big problems are found in subprime mortgages that other credit interactions with your banker will not change as well.

"The hassles of dealing with business financing are going to go way up, especially for small businesses," predicts Jeff Judy, a long-time consultant to the banking industry. Judy spends most of his time coaching banks on topics like credit analysis and problem loans, so he knows how bankers think, and how banks are reacting to the current credit crunch.

"Although the big problems are in the mortgage market, the mounting losses from that sector are making banks pickier about any kind of credit," Judy observes. "Even if you have had financing from your bank for years, you may find your next conversation with your banker to be longer and more stressful than you expected."

Here are some of the changes the business borrower should expect:

* More documentation, more formal confirmation of details, more follow up than ever before. Things that might have been "good enough" last year won't make the grade this time around. Your banker is going to want complete, up-to-date, and technically perfect documents.

* New cutoffs for your credit score. If your business loans are "credit scored," you may be surprised to find that you don't rate as high as you did last year. That doesn't mean your credit score went down, but rather that it takes a higher score this year to qualify for the same level of financing you had last year.

* Low tolerance for late or incomplete information. If you have been casual about getting your quarterly financial statements to your bank, for instance, you may find that your tardiness has suddenly become a major stumbling block on the path to continued financing.

* Heightened sensitivity to anything that involves real estate. While residential property has been the main source of the current credit trouble, expect banks to take an extra hard look at anything in your relationship that involves property, e.g., financing a new facility. If you have relied on property as collateral in the past, remember that your property may not have the same value it did when you initially signed the agreement.

As a business owner, it is all too easy to take it personally when the rules seem to change suddenly, Judy notes. "You have to realize that banks are scrambling to deal with a very serious situation, and most of them don't have the time or the staff to cope with their own problems and hold your hand at the same time."

Judy suggests that you can take some positive steps to reduce the hassles associated with the current credit market. "Bankers are overworked in these conditions," he points out. "That means that if you can make it easier for your bankers to do their jobs, they'll be happy to close your file quickly and move on to pick on somebody else."

Judy's recommendations for business owners:

* Do not get adversarial with your creditors. Picking a fight with your banker will increase your hassles, not reduce them. There's absolutely nothing to be gained by making this personal.

* Be responsive. Get all your documents in on time, return calls from your banker promptly. Don't give your bank any reason to think you are avoiding them, or hiding information.

* Allow a lot more time to complete your financing, whether a new loan or a renewal of an existing credit line. You may want to bring it up with your banker before the usual renewal date, so that you have more time to work through all the documents and fact checking the bank will demand this time around.

* Investigate your options -- that is, your bank's competition -- before you need them. The degree of credit problems and the severity of their responses vary widely from bank to bank. It's good to have someplace else to go if your own bank won't cooperate -- and it doesn't hurt for your banker to know you are aware of other choices in your market.

* Figure out how you will finance your operations if your credit is delayed or reduced. Even if it is eventually approved, the hassles of working through the extra processing and paperwork may mean that you need to draw on other resources to close the gap.

* Clean up any "minor" issues your banker has mentioned in the past. They may have become major issues in the new environment. Or they may have held down your credit score slightly, so that it won't surpass the new, higher thresholds.

Jeff Judy cautions business owners to "keep a cool head and look at this as just another business problem. No one is calling you dishonest or incompetent. But your banker is under a lot of pressure, and some of that pressure is going to land on your shoulders as well." Putting in the extra time and effort to manage your relationship with your bank can give you a big advantage, compared to the borrowers who fail to realize that it's no longer "business as usual." That makes you a more appealing prospect for financing under reasonable terms, whether with your current bank or with a competitor.

"If you have had financing for your business in the past," Judy says, "you are probably still 'bankable' in today's environment, but only if you are willing to meet your banker's new needs for really clean transactions." Understanding the banker's pressures and concerns is a key step in getting the results you want for your business.

About Jeff Judy

Jeff Judy provides consulting to bank management, delivers training to bank employees, and appears as a speaker at numerous trade association meetings and industry conventions related to financial services. With more than than 30 years' personal experience in the banking business, he has helped national, international, regional and local companies and associations. In addition to working directly with clients, Judy spreads best practices among financial services management and employees through articles in trade journals and client newsletters, and through his own bi-weekly e-zine, Jeff's Thoughts.

###

Other Article Sites

findabook.com  moneycd.info  a-mortgage.info   about-lemon-laws.info  aboutstudentloans.info
all-about-publishing.info  auctions-articles.info  bestcollege-university.com  bestispconnection.com
biblefolder.com  blogger-website.com  books-used.info  brokers-guide.info  buywindows.info  cable-dsl.info
career-miner.com  carpel-tunnel.info  cashinaflash.info  cashloanreviews.info  casinobell.com  chat-house.info
clearmycredit.info  collegeloantips.info  crones.info  depression-articles.info   dirnic.net  dishguides.info
divers-below.com  expodog.info   financewizz.com  fire-insurance.info  getgood.info  handleit.net   it-idea.info
health-supplies.info  hosting-right.com  insidealert.com  insurance-facts.info  jobs-employment.info
justgood.info  lookgold.net   lowcost-travel.info  money-source.info  myhostzone.info  numisblog.com
peoplesearchfinder.info  pr-articles.info  realeas.com   refinancing-guides.info  spyware-remove.info
telelot.info  the-law.info   toppaid.info  travel-deals.info  travelcorrect.com  wedding-guide-site.com
your-blog.info  your-credit.info

Evaluating Credit Card Processing Companies
There are numerous credit card processing companies to choose from, each offering different features and fees. Choosing a company to process your customer's credit card payments can be a daunting task, and sometimes you'll experience difficulties both looking for a merchant account provider and then afterwards- if you make the wrong selection!

How Students Can Manage Their Student Credit Cards
Surveys prove that many college students graduate with unpaid debts on their student loans which can amount to $20,000. Those who are still in college are faced with credit card debts amounting to $7,000 or even more. Even worse, there are many at a young age of 15-25 have already filed for bankruptcy. If you?re a student who owns a student credit card, these staggering surveys should definitely concern you. What can you do to avoid falling victim of bad credit?

Credit Counseling Executive Advises FTC How Consumers Can Select a Quality and Legally Operating Credit Counseling Agency
In response to the current credit and foreclosure crisis, the American Association of Debt Management Organizations (AADMO), the largest trade association for the credit counseling industry, advised the U.S. Federal Trade Commission (FTC) that consumers can find the nation's most comprehensive listing of legitimate and approved credit counseling agencies on the AADMO web page at www.AADMO.org.

Unique Credit Refund Guarantee for NFL Picks in Super Bowl Offered by Mycapper.com
Well-known sports handicapping service Mycapper.com is offering a unique guarantee for all Super Bowl picks sold by handicappers on their website. All NFL picks offered on the website for Super Bowl XLII will be backed by a 200% credit refund guarantee.

Credit Repair: The Whole Story
The Right Way When most people think of credit repair they think of credit bureau disputes Historically credit bureau disputes have been the heart of the credit repair process

Bad Credit Debt Consolidation Loans - Getting a Debt Consolidation Loan, Even With Poor Credit
An online debt consolidation loan allows even people with a poor credit to reduce their overall monthly payments and regain their financial footing. While there are personal loans that allow you to do this, tapping into your home's equity is a better option.

Texaco Gas Credit Card
Gas stations around the world are now offering credit cards that you can use at their station for rewards These credit cards can of course be used in any place, but the rewards are regulated to car expenses such as gas, services, auto parts, and convenience store items

The Corporate Credit Solution With Business-Tradelines.com
A leading corporate credit solution company is offering startup business financing assistance to those new and small companies in need of credit to circumnavigate the implementation of FICO 08.

Home Equity Lines of Credit Vs. Other Conventional Loans
When it comes to getting money, you have two basic options. If you are a homeowner you can choose to take out a home equity line or credit (HELOC), or you can take out a conventional loan.

Seven Tips For Credit-Enhancing Your Business Loan
What are the avenues available to businesses with weak credit profiles or to companies pursuing credit transactions that are perceived as too risky by credit providers? Many companies apply for credit at banks, finance companies or equipment leasing firms and are routinely rejected due to the high degree of perceived credit risks. When approaching a credit provider, it is helpful to understand what can be done to reduce the risk of a credit transaction in the eyes of the provider.

Airlines Credit Cards: Choosing The Best Fit
An airlines credit card provides significant benefits to anyone that travels regularly, or that would like to earn airline miles. Many of the lenders offering this type of credit card are unique from each other. Therefore, when deciding on and choosing the best fit, be sure to read all terms and agreements before signing up for these lines of credit. One of the most obvious differences between airlines credit cards and standard reward based credit cards is that they offer airline miles, usually through frequent flyer miles.

How Does Credit Repair And Debt Consolidation Works?
Even though everyone?s financial situation is unique, practically all of us have some sort of debt. It might be huge debt like with mortgages and loans or small credit card or department store credit debt. The only way to wind up with debt is as a result of being extended credit. In these financial times we are in it can be difficult to get by without credit. But too often it becomes difficult to pay off the credit and that is when the trouble begins. Once you are late in your payments, your creditors will report this to the credit bureaus and it will affect your credit rating. When you are stuck with a bad credit report, even if you have a good reason such as illness, etc, it will be very difficult for you to get credit in the future when ...

Credit Cards For People With Bad Credit Scores
Sometimes life lands you in a situation that causes your credit to suffer. A job loss or illness can send your credit rating south leaving you with nothing to do about it.

Tips For Choosing A Credit Card
If your mailbox is anything like mine, it brings you a new credit card offer at least daily. The trouble is choosing the credit card that makes most financial sense for you. This article will touch on a few of the most important factors, and will hopefully help you choose the best credit card for your needs.

Bad Credit Loans Offer Last Line of Credit
As money becomes increasingly scarce, bad credit loans (http://www.loansbadcredit.org.uk) offer the last line of available credit explains Andy Hygate from www.loansbadcredit.org.uk.