Telltale trouble – How to assess if a customer will fail

Description

Abstract: The economy is on the mend, but businesses of all kinds continue to shut their doors. To protect themselves, banks need to identify borrowers that can’t turn themselves around. Identifying strengths will help them predict which of their business-loan customers likely will emerge from the down economy in good shape. And spotting warning signs will help them make the correct lending decisions — even when it means pulling the plug. This article describes both the strengths and weaknesses to look for.