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Bringing Visibility into a Common

Commercial Lending Blind Spot


July 15, 2020

The coronavirus outbreak is causing global concern and economic hardship across countless industries, businesses and communities. The situation is changing quickly with widespread impacts. Most experts anticipate US commercial bankruptcies climbing into the millions within the next 12 months. Lenders will need to revisit lending strategies and develop effective credit risk management programs for limiting potential loan losses.  

Portfolio Assessment

Financial institutions will need to conduct thorough reviews of their clients and evaluate the health of their debt portfolio. According to experts from FICO, lenders can segregate and prioritize clients based on the following: 

  • Clients who are currently delinquent
  • Clients who have been delinquent in the past
  • Clients who have excellent payment history

Limit Potential Losses 

Financial institutions will want to create a plan of action to limit potential loan losses and position their organizations for growth once the economy stabilizes. AIS has teamed up with several banks to create portfolio monitoring solution to help mitigate collateral and credit risks. These banking institutions offer Account Receivable lines of credit to their commercial borrowers.

AIS Early Warning loan monitoring service provides direct insight into bankruptcy activity for Account Receivable lines of credit. For each loan, AIS proactively monitors the companies listed in the expected receivables pool and notifies the lender when a bankruptcy is filed. Lenders can then adjust credit lines as needed to minimize their financial exposure.

Alerts can be sent daily, weekly or monthly, advising lenders of new business bankruptcies and changes in case status which include: Discharge, Dismissal,  Close, Termination, Transfer, Re-Open, or Conversion. Early Warning uses AIS SmarMatch logic to ensure the utmost confidence when matching our bankruptcy information to companies on your A/R lists. 

With the continual rise in business bankruptcies, some lenders have started spreading borrower financials more frequently. Organizations can bundle Early Warning with AIS’s Financial Spreading service to manage upticks in volume while serving as an augmentation to their existing staff. Our spreading solution helps identify commercial loans on a monthly or quarterly basis that may require adjustments to existing lines of credit. Our degreed, finance experts excel at the detailed and process complexities, having completed thousands of spreads and maintaining a 100% quality score. 

Contact us at any time for a free evaluation of AIS Early Warning and our financial spreading service.


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