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Article: Using global cash flow: the RMA Journal has provided a forum for some spirited debate about the usefulness of global cash flows (see the end of this article). Here, the author discusses GCFs, their construction, and their application in enhancing loan decisioning.(Private Banking)
- Article from:
- The RMA Journal
- Article date:
- September 1, 2006
- Author:
CopyrightCOPYRIGHT 2006 The Risk Management Association. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Answer: Global cash flow.
Question: What type of repayment measure may merit greater consideration than it currently receives?
Typically and understandably, commercial lenders depend on cash flow from a business as their primary repayment source for a loan; real estate lenders rely on cash flow from real estate; and private bankers usually look to an individual's personal cash flow. As a secondary source, commercial and real estate lenders often rely on guarantors. When the guarantors are individuals, then personal cash flow becomes that source (along with personal liquidity).
So, with the exceptions of nonrecourse and capital market lenders, ...