East West Bancorp, Inc. · NASDAQ:EWBC
East West Bancorp — Investor Presentation
39 slides from East West Bancorp's investor presentation
Slide 1: Credit Reporting for a Small Business
Credit Reporting FOR A SMALL BUSINESS
Slide 2: Welcome
Welcome 1. Agenda 2. Ground Rules 3. Introductions CREDITREPORTING ‹#›
Slide 3: Objectives
Objectives • Explain the concept of credit reporting and the impact of credit reports on the operation or growth of a small business. • Identify the credit reports and other reporting systems commonly used to assess the risk of extending credit to a small business. • Explain how these credit reports
Slide 4: Objectives (continued)
Objectives (continued) • Identify the benefits a small business derives from a positive record of managing its debts and obligations. • Identify risks to a business from credit-related scams or frauds and take steps to avoid or mitigate harm caused by them. CREDITREPORTING ‹#›
Slide 5: Objectives (continued)
Objectives (continued) • Identify the common practices and products, tools, and services that are available for a small business to help in proper credit reporting. • Identify strategies to build or improve credit to improve the business’ credit. • Explain how the personal finances of a business own
Slide 6: What Do You Know?
What Do You Know? What do you know or want to learn about credit reporting? CREDITREPORTING ‹#›
Slide 7: Credit Reporting
Credit Reporting • Provides information by banks, lenders, investors, landlords, businesses, and government agencies • Contains an analysis of: • Credit worthiness • Insurance underwriting • Employment • Certain licenses • Continued credit terms • Business needs CREDITREPORTING ‹#›
Slide 8: Credit Report Impact
Credit Report Impact • Borrower seeking credit • Report user • Reporter of information CREDITREPORTING ‹#›
Slide 9: Business Credit Reports
Business Credit Reports • Participation might increase marketability • Established accounts are monitored and controlled • Data may be used to obtain business credit CREDITREPORTING ‹#›
Slide 10: Business Credit Reports (continued)
Business Credit Reports (continued) • Obtain a tax ID number from the Internal Revenue Service (IRS) and a DUNS number. • Subscribe to a reporting service that meets your needs and budget. • Provide your business registration information, financial statements, and accounts to be included in the repo
Slide 11: Discussion Point #1: Business Credit Reports
Discussion Point #1: Business Credit Reports • Have business credit reports helped your business? • What have been some of the challenges of business credit reports? CREDITREPORTING ‹#›
Slide 12: Business Credit Reports (continued)
Business Credit Reports (continued) • A business credit report includes: • Commercial credit risk score • Indicators to predict the potential for business failure • Credit filings in existence for secured property • Business ownership information • Other businesses owned by the same organization • P
Slide 13: Three Key Business Reporting Agencies
Three Key Business Reporting Agencies CREDITREPORTING ‹#›
Slide 14: Consumer Reporting Agency
Consumer Reporting Agency • Any person or business that assembles or evaluates credit information on consumers http://www.annualcreditreport.com CREDITREPORTING ‹#›
Slide 15: Discussion Point #2: Consumer Reporting Agency
Discussion Point #2: Consumer Reporting Agency • What are some of the reasons a business owner may have for reporting consumer credit information to a consumer reporting agency? CREDITREPORTING ‹#›
Slide 16: Reporting Consumer Credit Manages Risk
Reporting Consumer Credit Manages Risk • Notice of debt incurred • Notice of property used as collateral – Uniform Commercial Code (UCC) • Increases timely payments • Greater debt recovery potential • Uncover fraud • Locate debtors CREDITREPORTING ‹#›
Slide 17: Reporting to Credit Agencies
Reporting to Credit Agencies • Retail locations must have: • Location with secured Locks • Separate office with secured files • Protection of data • Secure computers CREDITREPORTING ‹#›
Slide 18: Requirements to Report Directly
Requirements to Report Directly • Secure location with secure practices • Minimum number of accounts reporting monthly • Software purchases for reporting and handling disputes • Accurate record keeping and reporting • Separate setup fees to pull credit • Training CREDITREPORTING ‹#›
Slide 19: Reporting through a Local or Regional Agency
Reporting through a Local or Regional Agency • Option if you do not qualify to directly report • Comparison-shop • Know what fees and costs you may pay CREDITREPORTING ‹#›
Slide 20: Additional Services of Agencies
Additional Services of Agencies • Employment – Prescreening and employment package services • Changes – Address, contact information, and bankrupt debtors • Collection services – Take legal action to recover debts or buy debts CREDITREPORTING ‹#›
Slide 21: Additional Services of Agencies (continued)
Additional Services of Agencies (continued) • Marketing – Mailing lists of like customers • Lower risks – Fraudulent accounts • Lower compliance risks – Agency models and training with Fair Credit Reporting Act (FCRA) and Fair Credit Billing Act (FCBA) CREDITREPORTING ‹#›
Slide 22: Fair Credit Reporting Act
Fair Credit Reporting Act • Defines consumer credit reporting • Business purposes for use of reports • Consumer authorizations for use CREDITREPORTING ‹#›
Slide 23: Fair Credit Reporting Act (continued)
Fair Credit Reporting Act (continued) • Fraud alerts • Disputes • Identity theft • Access to free reports • Policies and procedures • Limitations on the use of the report CREDITREPORTING ‹#›
Slide 24: Fair Credit Reporting Act (continued)
Fair Credit Reporting Act (continued) • Use of credit scores • Complaints received by the Federal Trade Commission • Civil liability for negligence • Responsibilities of those furnishing information CREDITREPORTING ‹#›
Slide 25: Discussion Point #3: Fair Credit Reporting Act
Discussion Point #3: Fair Credit Reporting Act • How does the Fair Credit Reporting Act impact your business? CREDITREPORTING ‹#›
Slide 26: Fair Credit Billing Act
Fair Credit Billing Act • Billing practices and errors • Payments – crediting accounts promptly • Returns – offsets CREDITREPORTING ‹#›
Slide 27: Risks and Responsibilities of Handling Personal Information
Risks and Responsibilities of Handling Personal Information • Noncompliance can include losing more than your business reputation CREDITREPORTING ‹#›
Slide 28: Personal Credit Impact on Business
Personal Credit Impact on Business • Build business credit with personal liability. • Establish credit with vendors and suppliers. • Build credit with your local bank in the business name. • Maintain established vendor and supplier relationships. CREDITREPORTING ‹#›
Slide 29: Your Personal Credit
Your Personal Credit • Review your credit report at least once every year for errors • Dispute errors quickly • Provide documentation to support claim • Send directly to creditor • Request all repositories to be updated • Request a new credit report to verify CREDITREPORTING ‹#›
Slide 30: Improve Your Personal Credit Scores
Improve Your Personal Credit Scores • Pay your loans and other bills on time • Avoid judgments and tax liens • Comparison shop for financial services • Keep older accounts and pay them off monthly CREDITREPORTING ‹#›
Slide 31: Personal Guarantor Advantages
Personal Guarantor Advantages • Indicates your support of the business to lender • May help to establish credit • May ease start up or cash flow • Better loan terms CREDITREPORTING ‹#›
Slide 32: Personal Guarantor Disadvantages
Personal Guarantor Disadvantages • May be required to make payments, if business defaults • May risk losing personal assets, including your home • Spouse may be required to sign, if you are married • Other implications with partnerships and owners CREDITREPORTING ‹#›
Slide 33: Discussion Point #4: Personal Guarantor
Discussion Point #4: Personal Guarantor • What are the challenges of being a personal guarantor? CREDITREPORTING ‹#›
Slide 34: The New Small Business Owner
The New Small Business Owner • Your personal credit is the foundation for building business credit. “Remember that credit is money.” – Benjamin Franklin 1748 This is still true today! CREDITREPORTING ‹#›
Slide 35: Top Five Key Points to Remember
Top Five Key Points to Remember • Know what is on your personal credit report by ordering a free credit report. • Establish a credit history for your small business. • Request a copy of your business credit report. CREDITREPORTING ‹#›
Slide 36: Top Five Key Points to Remember (continued)
Top Five Key Points to Remember (continued) • Consider providing timely information to the credit agencies on how customers repay their debts. • Be aware of and follow all laws and industry standards relating to credit reports to avoid costly fines or legal judgments. CREDITREPORTING ‹#›
Slide 37: Summary
Summary • What final questions do you have? • What have you learned? • How would you evaluate the training? CREDITREPORTING ‹#›
Slide 38: Conclusion
Conclusion • You learned about: • The purpose for credit reporting and different types • Differences between business and consumer credit reports • Agencies, repositories, and reporting CREDITREPORTING ‹#›
Slide 39: Conclusion
Conclusion • You learned about: • Benefits, risks, and responsibilities of credit reporting • The effect personal credit can have on your business • How to be a better applicant and improve your own credit CREDITREPORTING ‹#›