Knowing the Credit and Lending Cycles

By The Bank of Clarke County

Have you ever noticed that credit and lending run in certain cycles?  Take spring for example. As the weather warms, thoughts of cabin-fevered individuals turn to new and used automobiles, home improvement and house construction.  As summer heats up, vacation loans and paying off credit card balances allow travelers to enjoy a reviving trip to somewhere nice.  College expenses begin to materialize mid-summer.  As we slip into fall, auto dealers start looking at discounted deals for buyers to clear their inventory before the next year’s shiny models arrive.  Late fall becomes a rush to cover Holiday expenses without “breaking the bank.”

All of these cycles help to drive our economy.  How?  By spurring consumption of goods, such as vehicles, building materials and other things that consumers and businesses need.  Without spending of this type, sales lag and companies find it more difficult to meet THEIR expenses, including the purchase of inventory and payroll, which can lead to layoffs, depressed wages, etc.  As a result, consumers find higher prices in everything from gasoline to food to personal items to offset the loss in revenue.

It’s a tricky balancing act, but one that works extremely well when things are going well.  For the past several years, we all have enjoyed an atmosphere of low interest rates that bring the “cost” of money (i.e., loans) way down.  But news coming from the markets and the Federal Reserve are indicating a possibility that money may start costing more in the near future.

What should you do?  When the potential for rising interest rates becomes more certain, consumers and businesses alike should look closely at their borrowing needs over the next several years.  Thinking about buying or building a house?  Replacing cars?  Doing any home renovations?  If you’re a business, are you contemplating an expansion?  Increasing inventory?  Buying real estate?  Replacing an aging fleet?

If you answered yes to these or other borrowing reasons, you should try to take advantage of current rates, saving you money over a long period of time by having less interest costs.

Ready to borrow?  Here are some documents that you should bring with you for your initial meeting with a lender:

IF YOU’RE A CONSUMER you might bring –

  • Identification (due to 9/11, requirements have become much more stringent in proving who you are – driver’s license, social security card, ID card, etc.)
  • Paystubs or other documents verifying your gross and net income
  • Previous 2 years’ W-2 tax forms
  • Bank statement(s) showing balances and activity
  • Name and address of attorney or settlement company if you’re getting a mortgage
  • Previous 2 years’ signed personal tax returns and all attachments

IN ADDITION, IF YOU’RE A CONSUMER WANTING TO REFINANCE A MORTGAGE

  • Copy of the deed
  • Copy of the current note
  • Copy of your mortgage statement
  • Copy of proof of homeowner’s insurance
  • Statements for any accounts you’re paying off with this refinancing

IF YOU’RE A BUSINESS you might bring –

  • Your business plan
  • Business tax returns with all schedules & K1s (2-3 years)
  • Current balance sheet and profit and loss statement
  • Debt Schedule
  • Budget or proforma document if the business is new
  • Organizational documents, if applicable
  • Breakdown of owner names with % of ownership
  • Accounts Receivable/Accounts Payable reports
  • Inventory Report
  • Equipment List
  • Proof of Insurance

Please note that this is just a general listing and borrowers may require other documents in addition to those listed here.

Finding a good lender can be as daunting as deciding to go into debt.  Look for one that is established locally.  Ask your friends and neighbors about any good experiences they have had with lenders.  They will have first-hand knowledge of the experience.  Make an appointment and be prepared (see documents list).   And then make that all important step of borrowing to fulfill your needs.  Throughout this process, you should feel as if a partnership has been created.  The lender wants to see you succeed just as much as you do.

Borrowing money can be an anxious time, but thrilling as well, knowing that your new or used car, new home or remodeling or new business expansion awaits.  Take that all-important first step TODAY!


The Bank of Clarke County was established in 1881 and  has 13 locations, including three in Loudoun County:

  • 203 Hirst Road, Purcellville
  • 44810 Saranac Street, Ashburn @ One Loudoun
  • 504 East Market Street, Leesburg

Through local, seasoned lenders, Bank of Clarke offers a full line of consumer, mortgage and business loans, and is an Equal Housing Lender.  Their philosophy is simple – lending locally improves the financial health of consumers and businesses (your friends, family and neighbors) which improves the vibrancy of local communities.  Contacting Bank of Clarke is simple.  Drop in, call 800.650.8723 or go online at bankofclarke.bank.

[Ask The Expert is a promotional program sponsored by Loudoun Now. The writers have held out that they have experience, training, education and/or certifications to qualify as experts in their fields. Although shared on Loudoun Now‘s online platforms, the writers are solely responsible for this content.]

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