Credit and Collection Policies Flashcards
To formalize its decision processes regarding the day-to-day management of credit decisions and the resultant collection challenges when account are slow to pay, or fail to pay amounts when due
Credit Policy Manual
Summary of over-all objectives of the Credit Risk Management process detailed within the manual
Mission Statement
External Factors to Consider in Formulating Policies
Business Cycle
Monetary and Fiscal Policies
Political
Regulatory
Industry
Internal Factors to consider in Formulating Policies
Over-all Company Objective
Other Department Policies
Financial Condition of the Company
Accounting Procedure
an estimated ceiling of the creditor as to amount of credit which may be extended safely to a credit applicant or debtor
Credit Limit
Method to determine credit limit
Credit Agency Reports
Net Worth Calculations
Trade Reference Calculation
Needs-based Calculation
Financial Statements
Payment Performance with the ratings: Low, Moderate, Critical
Credit Agency Reports
A process that happens behind the scenes, where a lender screens customer’s credit to determine whether to extend credit without the consumer’s knowledge
Pre-screen
Review after the application is accurately and completely filled up
Cursory Review
Determine whether or not applicant is qualified
Preliminary Interview
The policy is that no credit extension should be approved and released unless the client at least filled up what?
Credit Application
Documents for Individual Borrower
Latest Income Tax Return
Marriage Contract (if married)
Photograph
Documents a Single Proprietor must submit
Business Information Sheet
Certificate of Business Name Registration with DTI
Income Tax Return
Audited Financial Statements
Statement of Assets and Liabilities
Photograph of Principal/ owner
Documents that a partnership/corporation must submit
Business Information Sheet
Copy of Registration with SEC
Articles of Incorporation and By-Laws (Corporation)/ Articles of Co-partnership and partner’s resolution (Partnership)
List of officers and directors certified by the corporate secretary
Bio-data/ Personal Information of officers and Directors
Alien Registration Certificate of Foreign Officers
Audited Financial Statements
Board Resolutions to borrow or enter into the requested facility in the amount of, and designate authorized representative to negotiate and sign in behalf of the company
