How Banks Evaluate Your Loan Applications

I recently attended a workshop by Alan Mintz, author and trainer of bank executives.  He presented a simple acronym (PARSERS) that banks everywhere use to evaluate your requests for financing.  Here it is:

P – person – Do we like this person?  Do they have good character?

A – amount – How much do they need in total, added up to the worst case scenario.  No surprises!

R– repayment – What is their ability to repay?  What is their cash flow?  Cash is king!

S– security – What kind of skin does the borrower have in the game?

E – expediency – Are they a fit for the kind of business we’re looking to finance?

R– Remuneration – What services does the client currently buy?  The more services purchased, the better terms we can give them.

S – Services – What other services can we see them wanting in the future?

Learn to speak the bank’s language.

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