Looking Outside the Borrower

Abstract

In analysing a credit, we need to look both at the borrower itself and at the conditions in which it operates. These may be general — the political and economic climate for instance — or they may be more specific to the company itself, or to the industry in which it operates. Understanding these external factors is as important as understanding the internal aspects of a company. It is also as easy to jump to conclusions or make superficial assessments — and as dangerous.