The new 4 C's of commercial lending
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Last week, I participated in a Finextra webinar on the topic of "Connected Credit and Compliance for Lending Growth" with panelists from ING, Vertus Partners, Misys and Credits Vision. As I prepared for the webinar, I thought back to my first exposure to commercial lending when I worked for a large regional bank and I recalled the 4C's of commercial lending from credit training: character, capacity, capital and collateral. All of those original 4C's are still relevant in today's environment when evaluating borrowers, but when considering the state of the commercial lending business in 2016, we need to think about an entirely new set of 4C's:
- Constraints on capital and liquidity
- Cost of compliance
- Changing client expectations
- Competition from new entrants