What is a loan review?
A loan review is “follow-up monitoring” of a loan or extension of credit by a bank
When does a review take place?
There is nothing to worry about when the bank contacts you for a “loan review”; in fact it’s a good thing.
If you have conducted a loan account in accordance with the terms of the loan and made repayments on time, the bank might call a loan review to offer a client a better interest rate, better terms, or because a loan has reached a point where it requires re-negotiation.
Keeping the bank happy
In the world of banking you are able to build up a good name, simply by keeping your credit record pristine. This good behaviour becomes an important asset for the business.
Make sure your bank manager understands your business – not necessarily every detail, but basic principles, the cash-flow dynamics and any risks that the business has to face. Provide a copy of your latest business plan if you have made any new changes.
Banks don’t like nasty surprises. If the business is experiencing difficulties it’s important that you inform your bank manager as soon as possible especially if your obligations to the bank will be compromised.
It’s important that you meet your bank manager in person, and meet regularly – especially if you wish to cultivate a long and beneficial relationship with your bank