Tag: Trusted Advisor

Psychology of Lending and The Dunning-Kruger Effect

Better Borrower Management

There is some basic psychology knowledge that all lenders must possess to help them excel on their job.  One field of psychology that lenders should understand is the Dunning-Kruger effect. The good news is that the Dunning-Kruger effect is not a disease, a syndrome or a mental illness.

What Lenders Need To Know About Tax Reform – Part 3

Tax Reform and Banking

Let’s pick up where we left off in Part 2. In that post, we covered interest deductibility, provided a prioritized list of industries of where banks can make their largest impact based on profitability, and looked at how to advise companies with international operations. In this article, we wrap up the series by looking at how the new Tax Cut and Jobs Act of 2017 (TCJA) impacts net operating losses, tax impairments and different types of financing.

Building A Better “Relationship Banker”– Part 3

Elements of Relationship Banking

This is Part III in our series of articles exploring the concept and implementation of a “trusted advisor” approach to banking. In Part I (HERE), we compared the profitability of a transactional banking model versus a relationship driven model and questioned why so many banks want to be relationship focused given the higher cost and execution risk.

The “Relationship Banker” And Profitability Trap – Part 2

Relationship Banking - Trusted Advisor

This is the second in a series of articles exploring the concept and implementation of a trusted advisor approach in banking. In Part I (HERE), we compared the profitability of a transactional banking model versus a relationship-driven model and questioned why so many banks want to be relationship-focused given the higher cost and execution risk.

Using Tax Returns For Better Loan Underwriting

Leveraging Tax Returns in Banking

Given all the energy around tax reform, we need to point out that tax returns are one of the most underutilized instruments in banking. Most banks require current tax returns from prospects as a condition to making a commercial loan.  There are many reasons why banks would want to have the information contained in a tax return as a prerequisite for prudent underwriting and ongoing loan monitoring.

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