Evaluation of the Farm Credit Quick Loan Analysis as a Valid or Invalid Scorecard for Small Business Loans between $100,000 and $250,000
نویسنده
چکیده
In the financial world there is a need for effectiveness and efficiency. The Farm Credit Quick loan analysis is a process created by Fair-Isaac. This analysis is referred to as scorecard lending. It uses a combination of financial data to determine the risk of the customer or candidate. Farm Credit fully adopted this process in 1997, for loans under $100,000.00. Efficiency and effectiveness is the very reason why such a process has become so popular in the financial world. This study examined if the Farm Credit Quick loan analysis for small business loans between $100,000 and $250,000 is accurate. The study revealed that the process is nine to twelve percent more conservative in denial and acceptance rate compared to the entire Association in 1999. The Farm Credit Quick loan analysis appears to be invalid because of its conservative nature.
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