In a previous Blog, I said that I thought it was essential to require some privately held customers to provide financial statement updates at least once a year. Since then, I have received several calls suggesting that requesting this information from customers would upset the apple cart. I disagree. I believe the bigger risk to the average credit professional involves extending a significant amount of credit to a customer without having current financial statements on file.
These days, requests for annual updates from privately held companies are routine. They may not provide the required reports in response to your first request. However, I cannot remember the last time a customer had a meltdown when I requested updated financial information.
Well, that’s my experience. What’s yours?
Michael Dennis’ Covering Credit Commentary. Michael’s website is www.coveringcredit.com.
The opinions presented are those of the author. The opinions and recommendations do not necessarily reflect the views of CMA, or their Officers and Directors. Readers are encouraged to evaluate any suggestions or recommendations made, and accept and adopt only those concepts that make sense to them.