Under what condition is a lessor's agreement always justified as part of the documentation to support a loan?

Select one:

a.when the loan is secured by equipment owned by the lessor

b.when the loan is secured by real estate

c.when the bank is named as a loss payee on the collateral

d.when the borrower rents the space where the business is located

What is the earliest recommended point during the loan process at which a business banker should review and reaffirm the terms of the loan, amount, rate, collateral, and guarantees?

Select one:

a.at the pre-loan closing meeting

b.at loan signing and closing

c.during follow-up after the loan has closed

d.during financial statement spreading

Which action is a benefit of follow-up after the loan closes?

Select one:

a.allowing the borrower to ask questions in advance

b.making sure that all the documents are complete and correct

c.updating the customer's file

d.conducting additional customer-bank negotiations

Which of the following options would be an appropriate primary source of repayment for a construction loan from a commercial bank?

Select one:

a.conversation of construction loan to a mortgage loan

b.liquidation of commercial property provided as collateral

c.personal guarantees of the property owners

d.liquidation of current assets

Assuming the number of periods and future value are unchanged, what happens to the present value (PV) of the loan or dollar amount as the interest rate increases?

Select one:

a.the present value (PV) increases

b.the present value (PV) decreases

c.the present value (PV) remains unchanged

d.The present value (PV) increases at the same rate as the interest

In the context of time value of money, which term describes the amount of money that is disbursed after a typical commercial loan has been approved by the bank?

Select one:

a.present value

b.future value

c.periodic payments

d.number of periods

As a genera rule, to achieve comparable returns, what should be the relationship of a taxable interest rate to a tax-exempt interest rate?

Select one:

a.the taxable interest rate needs to be higher than the tax-exempt interest rate

b.the taxable interest rate needs to be lower than the tax-exempt interest rate

c.the taxable interest rate needs to be the same as a tax-exempt interest rate

d.the taxable interest rate needs to be adjusted by the same percentage as the tax-exempt interest rate

Which item is a key consideration regarding the role of a business banker in the customer-bank negotiation?

Select one:

a.a business banker must keep in mind the goals and needs of both the bank and the customer

b.a business banker is responsible for negotiating terms that enhance the customer's profitability

c.a business banker should focus exclusively on what the bank wants in order to represent the interests of its depositors and investors

d.a business banker is responsible for negotiating terms that yield to the customer's risk appetite

Which lending philosophy generally allows higher loan authorities for individual business bankers so that they may approve or reject most requests, subject to later review?

Select one:

a.legal lending limit

b.supervisory loan-to-value (LTV)

c.decentralized approach

d.centralized approach

Which option is a common example of a "nice" term (negotiable) in a customer-bank negotiation?

Select one:

a."will accept" position

b.loan support issue

c.type of interest rate

d.many available financing alternatives perceived by borrower