The correct answer would be No. Based on the information we have, there appears to be no evidence of self-dealing between Harvard Westerman and the bank.

 

The correct answer would be Yes. The "Visions for Success" program is putting pressure on the bank’s lending function to increase its loan volume. It appears the bank is more interested in impressing their competitors and the community – and obtaining more business – than making sound credit decisions.

 

The correct answer would be Yes. Sean wants to waive all financial requirements on the loan for 30 days. In making the loan, the bank only has the borrower’s verbal statements or characterizations about its financial position.

 

The correct answer would be Need more information. We do not have the answer because the loan has not been made. However, the bank’s approach in extending the credit may give some clues about its attitude toward repayment. For example, the borrower wants the loan for six months, but the bank will write the loan for one year to give the borrower extra “flexibility.”

 

The correct answer would be Yes. Complacency seems to exist. The bank is relying entirely on the borrower’s representations without doing its own financial condition analysis.

 

The correct answer would be Yes. What experience does a small business and agricultural lender have in extending credit to a large electronics firm?

 

The correct answer would be Yes. Loans where repayment is contingent upon the occurrence of an uncertain event (such as the sale of a piece of property at a price higher than the borrower paid for it) or where the borrower has little or none of their money at risk are troublesome by their very nature. In this case, Harvard Westerman is putting nothing down and risking none of its own money. The bank is taking all the risk.