![]() In a similar vein, we have run sentiment analysis on a variety of credit memos and have presented our analysis HERE. The writer of the credit memo should be persuading the reader to approve the credit however, the credit memo must lay out the pros and cons of the loan fitting the bank’s credit framework. In other words, a credit memo is an opportunity for a lender to be an advocate for the borrower using objective analysis and logical reasoning. Advocacy loses its persuasion if the analysis is based on feelings, is biased, or is simplistic. The credit memo should serve to persuade while acknowledging that every loan has risks. Persuasive: The main theme in a credit memo should be objective persuasion. Therefore, it is not a pertinent risk of a specific loan. Good credit memos will identify the top three to five risks and then show how each risk is protected or mitigated in the structure, pricing, cash flow, collateral or other support. Risks Upfront: The overarching objective of the credit memo is to outline the pertinent risks of the loan and identify the mitigating factors to those risks. Every loan has some risks, and some loans have more risks than others. However, credit adjudicators (executive management, loan committees and board of directors) do not want to see ten main risks. The drafter’s job is to identify three to five main risks and then identify and explain fully those risks and the mitigation to those risks. We sometimes see memos with a laundry list of risks, but a drafter’s job is to identify the pertinent risks for that credit. Further, risks that affect all credits need not be mentioned. A recession will impact every borrower’s ability to repay the loan. These recommendations are not related to underwriting or credit analysis, but rather on the general content, style, and layout of the effective credit memo. The table also automatically calculates the totals and discounts for you to prevent errors.We review hundreds of credit memorandums every month from a wide variety of community banks across the country. Generally, the credit memos are carefully considered, well planned and appropriately formatted. We read memos from banks ranging in asset size from $100mm to over $10B and loans ranging from $250k up to just over $50mm. We look at memos for annual reviews and submission for new CRE and C&I loans. While most bankers are skilled and proficient at formatting and arranging the layout of the credit memo, we would like to share our top recommendations for bankers for drafting better credit memos. Here, you can type in the details of the credit or debit for a particular product or service, as well as the corresponding amounts. There’s enough space for your location and contact details, however long they may be.Īt the bottom of this is the table for all your products or services. There’s the name of the company or individual, complete address, and contact numbers. Then, the information section shows where the memo comes from and where it is going to. ![]() This template features a single worksheet tab that allows you to put a check mark whether you want to create a Debit or Credit memo. This template provides a convenient way for you to create and send memos to your customers in a way that looks professional and versatile for whatever your business needs and branding strategies are. ![]() ![]() The Credit & Debit Memo Excel Template is a wonderful, convenient template that allows you to instantly create Credit and Debit Memos for your customers.
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