Credit Evaluation School Instructor eBook - Oct 2023

People:

Borrower: Oil Be Back, LLC Guarantor: Terry Mennaughter Local oil change shop located on busy street

Purpose:

$250,000 term note to purchase property and inventory; loan originated years ago and note has been paid down to $150,000

Protection:

1st lien on commercial property Blanket lien on all business assets Income from business operations only. No additional guarantor income. Monthly P&I over fully amortizing term.

Payment:

Problem:

Three months ago business dropped off significantly as the street was closed for repairs. Loan has been paid 30 ‐ 60 days delinquent. Road is set to reopen next month with all repairs and improvements completed.

Prospects:

Commercial Credit Quick Hitter – Missing information Main issues here 1. The issue impacting the borrower appears to be temporary – how does that impact your decision process? 2. You may want more information than what is provided: DSCR; LTV, etc. What question might you ask to help in your decision.