Loan Agreement
True/False: The loan agreement should be relied on to determine the guarantors of the loan.
False
What type of payments do lines of credit typically have?
Interest Only
True/False: The borrower's name is found at the top of a guaranty document.
True - The borrower and guarantor name are both found at the top of the guaranty document
Which section of the Final Title Policy should name Commerce Bank as the Name of Insured?
Schedule A
Name a collateral type that could be included on a UCC Financing Statment.
Several possible answers including A/R, Inventory, Equipment, Chattel Paper, General Intangibles
Which loan document is used to make the claim of one party junior to (or inferior to) a claim in favor of another? Hint: We would use this document to assure that our debt gets paid back before the borrower's other debt.
Subordination Agreement
True/False: The interest rate information for a loan with a variable interest rate can be found in the Promise to Pay section of the Promissory Note.
False - this information would be found in the Variable Interest Rate section
Is the date for a guaranty document at the top or bottom of the guaranty?
Which document assigns the borrower's rights, as landlord under a lease or leases, to Commerce Bank for the collection of rent as additional security for a debt or other obligation?
Assignment of Rents and Leases
Which document secures our interest in a deposit account?
Pledge Agreement
Which type of loan agreement is typically used for revolving lines of credit that are secured by a/r, inventory, and/or equipment?
Asset Based Loan Agreement
There are three standard prepayment penalties that Commerce Bank uses - name at least two of them.
1% Prepayment Penalty
3-2-1... Prepayment Penalty
Yield Maintenance Prepayment Penalty
Which type of guaranty limitation can be utilized to provide default preventing guarantor support for the risk rating scorecard?
Unlimited Guaranty
What do we call the collateral value on an ARG review that is used for the collateral page of a packet?
CBI Value
What is our standard advance rate for cash on a pledge agreement?
100%
Name at least 4 types of loan agremeents
Asset Based Loan Agreement, Business Loan Agreement, Agricultural Loan Agreement, Construction Loan Agreement, Credit Agreement (participations), Legally Prepared (incl. Floor Plan Financing Agreement)
Which three sections of the Promissory Note do we focus on in Credit?
Interest rate, Payment info (amount and frequency), and Prepayment Penalty
Name one of the two situations in which the bank may require a spousal signature on a Commercial Guaranty.
1) The request is for business credit and the spouse is a shareholder, owner, officer, director, partner, or member in the business; OR
2) The spouse voluntarily offers to sign such a guaranty
Which section of an appraisal review contains the capitalization (cap) rate?
Income Capitalization Approach
What must we do to perfect our lien on equipment?
File a UCC Financing Statement with the Secretary of State and have the borrower/grantor sign a Security Agreement
Which section of the loan agreement contains financial reporting requirements and standard and non-standard covenants?
Affirmative Covenants section
In which section of the Promissory Note can the interest rate be found for a Term Loan with a fixed interest rate?
Promise to Pay section
Name three of the five types of guaranty limitations.
Unlimited, Limited to Note, Limited to Dollar Amount, Limited to Percent with Max Dollar Amount, Spousal Waiver
Why is it important to review the title work/final title policy for real estate collateral?
Make sure Commerce is listed as the lien holder and is in first lien position/make sure our lien is perfected, make sure the grantor on our deed matches the grantor on the title policy, make sure there are no encumbrances to our deed including property tax liens or other deeds filed ahead of ours
Which section of the Pledge and Security Agreement contains the margin call or standard advance rates of each type of collateral?
Insufficient Market Value of Securities