Banks take risks when they provide loans to insolvent clients. While collaterals reduce this risk, they cannot exclude it completely. Much depends on the initial verification of the borrower and the quality of scoring. If the financial condition of the client is assessed incorrectly, the likelihood that the debt will not be paid off increases.
In this case, we will explain how a financial company from Missouri quickly and efficiently verified potential borrowers, which helped to save $100,000.
Company Information: Financial Organization A is part of a private investment holding company with headquarters in Washington. It is engaged in financing business, provides loans to individuals and corporate clients.
Problem: Company A was contacted by Company B, an agricultural enterprise that wanted to take out a loan to purchase agricultural equipment with a total value of $100,000. The property of the company and its equipment was proposed to be pledged as collateral.
Objective: Verify the potential borrower.
Tasks: Minimize the risk of collaboration.
The management of the financial company decided against cooperation and refused to provide a loan to the agricultural enterprise. In the beginning, Company B made the impression of a reliable partner, but the fact that the company wanted to secure a loan with property and equipment which were already being held as collateral, was key in making the final decision. Perhaps this helped to save the $100,000 that the agricultural company requested for new equipment.