Show:
Loan Types
Loan Structure
Loan Policy
Real Estate
C & I
100
You can borrow what you need up to the credit limit and pay interest only on the amount outstanding. Some people compare me to a credit card that is secured with collateral.
What is a line of credit?
100
I am the tertiary(third) source of repayment if the borrower cannot repay its debt based on cash flow from operations. A loan that lacks this is called a Non-Recourse Loan.
What is a guarantor?
100
Per the Bank’s loan policy, we are the advance rates on equipment.
What is 90% (new), 80% (used)?
100
All commercial term loans (including mortgage loans) and multi-year line of credit facilities in excess of $500,000 requires this to be completed annually. The purpose is to analyze current financial information updates to accurately determine that continued satisfactory payment is expected and to confirm the accuracy of the risk rating.
What is an annual review?
100
You spend money to acquire or physically upgrade me. This tends to be a very large expense for companies with significant manufacturing facilities, and usually much less of an expense in the services sector. When this transaction occurs, it is considered a cash outflow and is sometimes included in the cash flow analysis.
What is capital expenditures (capex)?
200
I am a long-term commitment secured by a long term asset such as an office building, shopping center, industrial warehouse, or apartment complex.
What is a commercial real estate mortgage?
200
Period over which a loan agreement is in force, and before or at the end of which the loan should either be repaid or renegotiated for another term.
What is a loan term?
200
If 25% of a receivable is over 90 days, all receivables from that company should be excluded unless a satisfactory explanation is received and the appropriate waiver of me is obtained.
What is the taint rule?
200
This is a type of net lease in which the tenant pays all or part of the taxes, insurance, and maintenance associated with use of the property. These fees are paid in addition to the tenant's regular monthly rent.
What is a NNN (triple net) lease?
200
I am the calculation for EBITDA
What is Net Income+ Interest Expense+ Depreciation+ Amortization+ Income Taxes
300
Proceeds from this type of commitment are used exclusively for the improvement of real estate of which the Bank holds a mortgage. Advances are controlled by the Bank through a title company upon completion of a satisfactory inspection. During a defined period, the Borrower pays interest only, converting into principal and interest payments at a later date (usually 12-24 months after closing).
What is a construction loan?
300
Any type of loan that is paid after all other corporate debts and loans are repaid, in the case of a Borrower default. Chemical Bank will let monthly payments be made on the no defaults in our loan occurs. When calculating tangible net worth, this type of debt is added to net worth because it is consider “quasi-equity”.
What is Subordinated Debt?
300
This type of inventory has a 0% advance rate.
What is work-in-process?
300
I am the rate of return on a real estate investment property based on the income that the property is expected to generate. I am used to estimate the investor's potential return on his or her investment. I can be calculated by the Net Operating Income/ Current Market Value.
What is a capitalization (cap) rate??
300
This is recommended for all NEW formula-based lines of credit of $1,000,000 or more
What is a prefunding audit?
400
I am a partner lending program which uses a conventional Chemical Bank financing and direct SBA financing (with the help of CDCs: Certified Development Companies) to provide help with financing the acquisition, improvement, refinance of commercial real estate of equipment. The advantage of this program includes a low 10-20 year fixed rate, low down payment requirements, and an attractive 50% loan-to-value on the Bank’s loan.
What is a SBA 504 loan?
400
I am a numeric calculation used to assess a loan’s risk. The higher I am, the riskier of a transaction I am for the Bank.
What is a risk rating grade?
400
When is it acceptable to use a 10% rule approval (3 requirements)?
What is a.) The previous approval must be less than 1 year old b.)Works on new money deals up to 10% of ACE based on the last approval OR 3.) $1MM, whichever is less.
400
I am an independent opinion of market value performed by a state certified individual and documented in a written report that complies with FIRREA and USPAP. The opinion stated is for a specific point in time.
What is an appraisal?
400
I am an asset with no physical presence. Examples are non-compete, financing cost, trademarks, accounts receivables to officers, shareholders, and affiliates.
What is an intangible?
500
I am the classification for a loan made to an officer, director, or shareholder of Chemical Bank. All of these types of loans must be approved by the Board of Directors.
What is a Regulation O loan?
500
An agreement between two parties in which one party agrees to pay a fixed rate of interest and the other agrees to pay a floating rate of interest on an agreed upon notional amount. The Borrower pays the fixed rate to the Bank.
What is an interest rate SWAP?
500
6 instances when it is appropriate to use the non-material “change” form?
What is a.)To reduce the interest rate no more than 25bps from original approval. b.) Substitution or release of collateral that does not negatively impact the Bank’s collateral position or repayment of the loan. c.) Negotiate fees within 25bps of what was orig. approved. d.) Waive or reset a pre-payment penalty. e.) Covenant control requirements that do not materially change the Bank’s credit risk. f.) re-affirmation of an expired approval (90 days only)
500
Development, LLC is construction an apartment complex project to cost $7.5 million. The project's value at stabilization is appraised at $8.1 million. Assuming the bank restricts the loan amount to the lesser of 80% of cost or 75% of value, what is the proposed loan amount?
What is $6,000,000?
500
I am the classification for all loans with a 6 risk rating grade
What is a watch credit?