First, credits without a credit bureau query or despite credit bureau are not directly available through a bank. A credit intermediary provides exactly the same personal and financial data as a bank. There are differences between the different lenders. Credit at Foreclosure – Especially the ropes pull! Creation-free real estate loan without proof of solvency gives.
Fairness in lending loans
Fair lending requires understandable and understandable selection criteria. The evaluation of your company is based on a uniform evaluation process and thus the analysis of business opportunities and risk. The rating results determine the possible Conditions for your loan. Depending on the sector and the size of the company, the assessment process will be different, so that your house will actually have tailor-made guidelines.
The guidelines “Basel I”, “Basel II” and “Basel III” regulate the capital requirements for the bank. Depending on the risk of default, the bank must be able to place a loan with its own funds. This directly affects the terms of your loan. The procedure for assessing the counterparty default risk of the loan is the company rating.
There are also regulations on how to do this. The valuation includes standardized company-specific characteristics. Four-Eye Principle: Two bank advisers assess your home independently of each other. Company-specific: Depending on the industry affiliation and company size, there are various evaluation criteria. If high-risk loans are not secured by sufficient own funds from the bank, it can happen that the bank itself is in financial distress.
In the past, institutions that had too many “bad loans” on their balance sheets were in trouble. That is why the EU has issued a directive on own funds requirements for credit institutions and, in the light of the findings of the financial market crisis, has again extended these to new rules. As early as the 1980s, the Basel Commission on Banking Supervision drew up a proposal for an equity capital regulation for credit institutions.
It stipulated that credit institutions must have a share of 8 percentage points. Following Basel I, the regulations were clarified. For example, the required own funds with which the bank has to deposit a loan should be even more closely aligned with the actual risk potential. The EU Directive of 2007 builds on these requirements. One of the goals of Basel II was to put risk rates into interest rates.
Based on its findings from the financial market crisis, the Basel Committee has come up with new proposals for solutions. These are increasingly focusing on the determination of equity. With the implementation of the “Basel III rules”, which will be phased in from 2013 to 2019, credit institutions will have to have higher capital requirements than before. The tightened rules are intended to ensure that credit institutions can consolidate and secure their own initiative in the event of a crisis on their own initiative.
Of course, a global corporation has different corporate goals than a local service provider. Entrepreneurs Today there is no own founding model. In addition, as an enterprise customer, you also submit company numbers with your credit application, such as annual financial statements and profit and loss account. Your consultant examines these quantified characteristics and evaluates the net assets, financial position and results of operations of your company with the aid of a key figures catalog.
The second part evaluates the qualitative characteristics, which are determined by a questionnaire. Here are the following topics to bear: annual accounts, business valuations, account management, marketing, planning, corporate management. A credit institution applying a rating concept assigns a rating category to a credit institution based on different corporate and / or company-specific characteristics.
The basis for the calculation is, among other things, the annual financial statements that you submit with your application for borrowing. In exceptional cases – which are then easy to document – your supervisor can improve the specified credit rating. To ensure a secure and fair rating process, the process is highly standardized. Four-Eye Principle: Two bank advisers independently evaluate your house on the basis of quantified and high-quality characteristics.
Rating Class: The result is a rating class that determines your specific credit terms. Lite Lender control: The rating concept was reviewed and prepared by Lite Lender. The corresponding valuation class is derived from the valuation result. It shows the probability of default, ie the likelihood that a loan can not be repaid.
If the rating category points to an increased risk of default, the bank must provide sufficient capital to compensate itself for default risk. This is reflected in your credit terms in the form of higher interest rates, as the counterparty financing costs for the bank have also increased.