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Ethics is a very important topic in the lending business and its once that comes up a lot. In my career, I have had to face many ethical issues, make ethical choices and advise my colleagues who faced similar situation on how to approach a certain issue or dilemma. We are all humans and it’s natural to want to help everyone we can; specially those who truly deserve it and those who have earned a chance to realize a goal life. As a bank, we borrow funds from clients directly who have surplus funds by offering them guaranteed investment certificates and lending that same money to a prospective client, for a higher return of course. As a credit manager, I have the fiduciary responsibility to my employer and our clients who lend us his/her money to ensure that, I treat their money with the highest regards. For example, treat their money like it’s my own money. Although you have a client who is moral and needs a business loan to realize his aspirations, you need to keep in mind that, your role is to protect your employer and client’s money from any harm. To do this you must ensure that, you carry out the proper due diligence and ensure that you lend to those who truly qualify through traditional means. I would decline your clients request for a business loan and give him advice on how can qualify in the future. The last thing you need is to try to collect on an account that has gone into default, which you could have prevented.
Ideas for good recond management:
· Keep your business and personal expenses separate.
· Get sufficient documentation for all business expenses.
· Get a separate bank account for your business - and use it.
· Keep all your business records for a particular tax year together and in one place.
· Keep your business records for the correct length of time.
sorting the documents with proper manare
For a employer who seeking business loan who didnt proper documents,we should mitigate why they can't provide us,some business owner may have poor managements on sorting thier documents,such declaring tax,audted account, and bank statements:
In business loan we may mitigate the loan scores with using Tax tht paid by customer.We ask customer to pay and declare it immedeately ,sothat they can use it for loan porpose in future .
For bank statement,customer should increase on amount of deposits and reduce amount of debits to show off the strenght of accounts where we call it proxy income as well.
Some people who have rental income,didnt have tenancy agreemnt or credit history in bank statemnt .We have to advise them to meet a legal lawyer to prepare it and ask customer to bankin via cash or cheque to show up the other income as well.
We also can mitigate customer's income stability through aset where they fully paid of and base on credit history from federal bank as well.
documentation is one of vital part of servicing a loan.
when we have a proper ducumentation ,a healthy advance.
Thank you for your brilliant explanation which provided a lot of technical site along with the tools used for minimising risky aspects.
