Chad Cornett

What Banks Look for in a Commercial Loan Request

Tue, 04 Feb 2020 11:33:08 -0800

The first question I get asked as a commercial banker is What do banks really look for in a commercial loan request? Whether you are just starting your business or have reached a point where you are ready to expand, having outgrown your office or warehouse, there will come a time in the company’s venture when you find you need more funding than you have on hand. That is the time when you nervously approach your bank for a commercial loan.

You’ve probably heard the old saying that banks will only lend you money if you don’t need it, but on the other hand, do we want them to take chances with our hard-earned savings? If you think about it, the bank has a responsibility to be careful with the funds entrusted to it by the depositors, as well as offering loans to consumers and businesses. They can’t be too cautious, or they won’t make loans, and they can’t be too reckless or poor consequences will follow. Somewhere in the middle is the place where good loans are made, and entrepreneurial dreams come true. By planning ahead, you can increase your opportunity to get approval for that commercial loan.

The 5 C’s of commercial lending.

Just as diamond quality has four C’s (cut, color, carat and clarity), your bank will be looking at the five C’s in consideration of your commercial loan request.

Capacity: Are you able to repay the loan? Obviously, this is key. The bank will be looking at your company’s credit history to see how you have handled payments in the past, and at your current debt load. Generally speaking, your debt service coverage ratio should be below 1.2 percent, meaning that you have $1.20 of income for every dollar of debt that you hold. This ratio may be required to remain in this range to avoid technical default of the loan if granted.
Collateral: The bank will want some way to recoup its investment if you should fail to...Read More

Let's get started

Sun, 26 Jan 2020 19:32:01 -0800

Welcome to my blog. I was inspired to start this blog for many reasons, but the most important one is to help entrepreneurs. Over the past decade and a half, I have been in support of (economic development) and on the front lines with entrepreneurs as they build their legacy. My work allows me to observe their success, deconstruct their errors and appreciate the art in real time. Like most experiments, I will start this one small and see where it leads. If this blog can both educate and entertain, it will have served its purpose.

Feel free to engage, challenge and provide feedback. Cheers!

See ya later, suckas

Mon, 16 Jul 2018 09:17:29 -0700

Since given the responsibility to write my Father’s obituary I’ve made a habit of reading them daily. It is amazing how our life can be summed up in only a couple of paragraphs. I stumbled upon a noteworthy obituary this morning. Mr. Garrett Michael Matthias’s obituary here … and remember, tears are merely pain leaving the body. If you feel compelled you can contribute to his legacy as his GoFundMe page here.

Full text for those unable to click the link:

Garrett Michael Matthias
AKA “The Great Garrett Underpants”
3/26/13 – 7/6/18

My name is: Garrett Michael Boofias
My birthday is: I am 5 years old
My address is: I am a Bulldog!
My favorite color is: Blue….and Red and Black and Green
My favorite superhero is: Batman…and Thor, Iron Man, the Hulk and Cyborg
When I grow up: I’m going to be a professional boxerMy favorite people are:
• Mommy, Daddy, my sister ‘Delcina’ (Delphina),
• The grandparents with the new house (Fredric and Cheryl Krueger),
• The grandparents with the camper (Daniel and Nita Matthias),
• My cousins: Grady, ‘that guy I took down that one time’ (Luke), and London Marie,
• My Auntie Janette and Stinky Uncle Andy (Andrew and Janette Krueger),
• Those two guys, you know, my uncles (Kristopfer Krueger and James Taylor)
• Batman!!The things I love the most: Playing with my sister, my blue bunny, thrash metal, Legos, my daycare friends, Batman and when they put me to sleep before they access my port
Things I hate: Pants!, dirty stupid cancer, when they access my port, needles, and the monkey nose that smells like cherry farts…I do like the mint monkey nose like at Mayo Radiation and that one guy that helped me build Legos (Randy)When I die: I am going to be a gorilla and throw...Read More

2017 in Review

Tue, 02 Jan 2018 14:54:16 -0800

It is often easy to remember the wild fires, hurricanes, political unrest, sexual misconduct and so on when we look back on 2017, but the year wasn't all that bad. Check out Quartz article, the 99 best things that happened in 2017

Notable highlights:

1. An end to cholera, an estimated 80,000 deaths a year

2. Zika all but disappeared in 2017

3. China cracked down on pollution, reprimanding, fining or jailing officials in 80,000 factories

4. Over a billion people gained access to electricity in the 16 years

5. Suicide attempts by LGBT teens have decreased 14% thanks to the the legalization of same-sex marriage (Guardian)

Cryptocurrency

Wed, 18 Oct 2017 19:54:02 -0700

My business is mostly out of the office, but on the rare occasion I post for "office hours" I enjoy the occasional venture to the water cooler for a little office gossip. Today I heard a fellow banker say to an executive "I believe the biggest bubble is no longer Student Loan Debt, but Bitcoin." Of course I played naive to cryptocurrencies and asked, "What is Bitcoin?" He lost me at, "Well, according to Breitbart News..." Let's face it, even modern banking isn't creative relative to our other highly regulated peers (healthcare, energy, technology) but if the base technology of Cryptocurrencies is widely adopted it could truly be a disruptive change in how we exchange monies, fiat or not!

A better understanding of BitCoin, Blockchain and Cryptocurrencies:

Key articles booked marked over the years:

+ Cryptocurrency category via Wired

+ A letter to Jamie Dimon (via Medium)

+ Mike Tyson’s Bitcoin Wallet...Read More

Faking It, The Art Thereof

Sun, 15 Oct 2017 18:12:02 -0700

TED Talks - short powerful talks originally on Technology, Engineering and Design but have today spanned to almost any topic. This specific talk delivered by Amy Cuddy is a true favorite. She suggest that no matter the task or tall order one can overcome through self assigned confidence. I'd also recommend her book, Presence: Bringing Your Boldest Self to Your Biggest Challenges.