9Insurance Business ReviewJUNE 2025Business insurance market projected to reach USD 2066.73 billion by 2034, growing at a 9.32 percent CAGR from 2025 to 2034.CREDIT RISK AS CUSTOMER SERVICEcompany were tightening. Supply costs had increased dramatically in the prior couple of years and payroll was consistently moving up at a 3-5% clip. Revenues increased slightly but not as quickly as expenses due to the longer-term nature of the commercial contracts. The business had taken out some loans to finance new equipment in an effort to increase efficiency, but the loans were relatively highly priced. The smaller margins in the company led to declining cash balances, increased payables and an overall weaker balance sheet. The company's trends meant that maintaining the borrower's lifestyle at the current level would require tapping cash reserves at a level beyond what the operation could support.The Analyst and Lender worked through these questions and provided an in-depth analysis with the borrower. It turned out that the borrower was not planning a remodel at all and actually wanted the cash out refinance to put some additional cash into the business, feeling the stress of tightening margins. After working through the concerns, the borrower understood more thoroughly the cause of the tightening margins and withdrew the request.Building a Lasting RelationshipA couple months later, the borrower returned with a business partner and moved to open a line-of-credit request in the business's name to help shore up working capital needs. The borrower and the partner had renegotiated some contracts with their vendors after the understanding the bank had provided them with and wanted to continue to do business. The entire relationship moved over to the bank and the borrower eventually did end up doing a loan on their home for a remodel on their kitchen.In an era of industrialization of credit, where loans are processed at near-instant speeds by machines looking to break down creditworthiness to numerical values, differentiation can be done by slowing the process down. Credit worthy requests should make sense both for the customer and the lender and any disconnect is a place to tell a story. Spending time with customers, understanding their stories and working through financial statements provides a value that many don't offer in today's environment. This type of service creates loyal and lasting customer relationships that move beyond individual lending transactions. Spending time with customers, understanding their stories and working through financial statements provides a value that many don't offer in today's environmentQuick Bytes
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