How Banks Lend
The facilities themselves — each one read the way a credit desk reads it, not the way a brochure sells it.
Judgment presupposes literacy. You cannot read a facility request well if you do not know what the facility actually is — what problem it exists to solve, where its risk genuinely sits, and the specific ways it goes wrong. Product brochures will not tell you this: they are written to sell the product, so they describe features. These files are written to lend against it, so they describe behaviour.
Each file runs the same six questions: what problem the product solves, its anatomy, what it really costs, how the desk reads its risk, where it goes wrong in practice, and where this site works it — the drills and glossary entries that put each product inside a real judgment call. Useful from either chair: the banker learning to structure, and the borrower who wants to know what the bank across the table is actually weighing — How Banks Read You is that side of the same table — and the institution all of these products live inside is How Banks Work.
The spine bends where a product demands it. On the letter of credit file the second question is not anatomy but who the parties are, because on that product the parties are the anatomy — and the borrower’s own credit stops being the thing under examination.
A limit, not a loan. Two-rail pricing, the clean-down test, and the four utilization shapes a desk reads a book by.
Money for one specific trade, repaid by that trade. The cleanest repayment logic in lending — and the most fragile.
Turning an accepted usance LC into cash today. The one facility where the risk moves off your client entirely.
Money advanced once, repaid from years of earnings. The plainest product — carrying the most structuring judgment.
The most convenient credit a business will hold, and the only one repayable on demand. Cheap for noise, ruinous for structure.
Funding a living ledger of receivables. Advance rates, dilution, concentration — lending against a crowd.
A loan shaped by one asset: cost, working life, resale. The judgment is in who else could use the asset.
Lent against a building that does not exist yet, drawn as it goes up, repaid when it is sold. Time is the cost.
Borrow in the currency you earn; fix the rate on what you have not been paid yet. Both are credit.
The bank's promise to a third party on your behalf. No money moves on the day it is signed — the product a desk most under-reads.
The library grows as files are ready. Every figure in these pages is an illustration constructed for teaching — market conventions and ranges, not anyone's rate sheet — and nothing here is financial advice or an offer of credit.
// PRODUCTS MEET JUDGMENT
Knowing the product is the floor. The drills are where it becomes judgment — a borrower, a request, the data on the table, and your call before the senior banker's.
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