Being in the right place at the right time -26

Conditions, simply put, refer to the economic climate of the
marketplace. Consider this role-play:
Paulie: Donna, may I borrow $20?
Donna: Let me check my wallet

Notice the difference? This is the only C of credit that isn’t about you,
the borrower, and you cannot control directly.

Conditions are factors that range from the global economic climate to
the positive or negative influences on the particular lender the day you
apply for a loan with them. Other factors are the tightness and
availability of money due to controls by the Federal Reserve, the
prevailing interest rates, or the economic cycles of recession or growth.

While you cannot control the economic conditions, you can study,
predict, interpret and even mitigate them.
Study the leading economic indicators for the national economic trends.
New housing starts or building permits indicate an improving economy.
The increase of interest rates and tightening of the money supply may
signal fears of inflation. Mid-swing indicators such as new hires and
fires can show you the general trend of the economy.
Conditions include factors intrinsic to the
lending business or of a particular bank or
branch of the bank that are also conditions
that are considered in a lending decision. The
bank’s particular balance sheet requirements,
goals, and the underwriting requirements are
part of the bank’s conditions. If the bank doesn’t make a loan of a particular kind such as loans on
prefabricated homes, this particular condition, no matter how good the
other Cs are for you as a borrower, you won’t get that loan. This can
also help you. If a bank is looking to expand their business in a
particular area, such as small business loans, you may get a positive
lending decision because you were in the right place at the right time. If
the conditions are right the lender may overlook some small weaknesses
in your strength as a borrower.