Lending Staff
CI lending often requires a different skill set than that required for real estate-based lending. This doesnt mean that real estate-based lenders cannot become effective CI lenders with appropriate training and oversight, but it does mean that management should not merely ask real estate lending and credit administration staff to start making and monitoring CI loans and expect them to be effective immediately. It may also be increasingly difficult to hire experienced CI lenders and credit administration staff, as many community banks are seeking to expand into this market.
Community banks seeking to expand their CI lending may be best served by a combination of targeted training and selective hiring. Experienced commercial lenders and credit administration staff can be trained on sound CI lending practices and can learn on the job under the mentoring of experienced CI lenders and staff. Regardless of the approach chosen, management should recognize that even selective hiring and targeted training can be expensive and that personnel costs should be factored into the cost of any new or expanded CI program. Continue reading “CI lending requires a continually open, honest, and transparent business relationship between the lender and the borrower”