Question

Explain how a business banker prices a commercial loan?

Answer 1

Business banker is a person who is acting as a salesperson for the bank and it will be trying to get engaged into the expansion activities of the bank and it will be trying to often provide various kinds of customised loan offers to the clients so it will be trying to expand the activities of the bank through offering of customised loan to the clients.

The business banker will be pricing commercial loan after determination of the credit worthiness of the borrower and he will also look at the performance of the borrower from his past performance in regards to repayment of debt and he will also trying to be futuristic by discounting various kinds of risk which will be existing in the economy in coming years when there will be exposure of bank in regards to the loan with the borrower and these business banker will also be continuously trying to ascertain the integrity and label of creditworthiness of these borrower so that they would be trying to enhance the Business expansion by providing with customised loan facilities to the clients and hence it can be said that business bankers will be trying to proactively discount various kinds of risk and uncertainty along with creditworthiness of the borrower while offering commercial loan.