Monday, June 13, 2011

Top 12 Credit Portfolio Danger Signals of All Time

1. “I’m just in the middle of changing banks (or getting new financing).

2. Loss of an important customer

3. Loss of an important employee or manager

4. Slow receivables or a large bad debt – Domino effect!

5. Broken promises

6. Messages not returned

7. Writ or Statement of Claim from another supplier for goods sold or delivered

8. Change of ownership, management, death – do something NOW!

9. “I have no money”

10. Mail return

11. Trade rumours

12. Bank financing that includes extraordinary security such as assignment of life insurance etc.

* Remember: When there is evidence that things are going downhill, it is probably a lot worse than one might think.