Credit Evaluation School Dec 2022

Reference Guide for Credit Documents

Financial Statements • For consumer credits, may consist of pay stub and a personal financial statement, essentially a balance sheet for an individual. • For commercial credits, may include the following: – Tax returns for all parties – CPA financial statements (Compilation/Reviewed/Audited) – Balance sheet – Budget/projections – Interim financial information – Rent rolls/copy of leases

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Reference Guide for Credit Documents

Financing Statement / UCC / Security Agreement • Contract between bank and the borrower • Standard format modified by each state to meet local circumstances • Non ‐ real estate collateral provided by borrower to enhance payment prospects • Establishes priority of lien on collateral • Purchased money UCC has priority over all other UCCs regardless of date filing – Some filings are very broad (e.g. all farm equipment) • Most are filed through the Secretary of State

– Timber, mineral rights, fixtures filed with county like a mortgage • Search can be obtained based on borrower’s name • UCC is generally good for 5 years: Continuations should be filed.

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