Tag Archives: financial statements

Is the Borrower in Default? Sometimes It’s Hard to Tell

Let’s talk about borrowing money under revolving lines of credit.  Sometimes it’s not entirely clear whether the borrower is in default, and there’s a question as to whether they can borrow money.  Here are our facts:  The company needs to draw on its revolving line of credit, and it’s three weeks before the end of the fiscal … Continue Reading

False Financial Statements — Can You Rely on Representations from Your Borrower?

When you want to make a loan, you probably get copies of the borrower's recent financial statements, and you probably take a pretty close look at them as part of your credit process. You might even ask for more information about certain items that you see on the financial statements. But how often do you dig deeply behind the financial statements and conduct your own audit? Probably never, right? So what happens if the financial statements later turn out to be false?… Continue Reading
LexBlog