Chart ranking the ten most risky loans that banks can make.
If a new loan is too risky, bankers simply don't make it. But of the loans they do make, which industries make them most anxious? Loan Pricing Corp. (LPC) recently examined the risk ratings 85 banks gave to more than 7,000 loans to borrowers with revenues of $50 million or less. The loan ratings were sorted by industry, then averaged and arranged on a scale of one to 10, least to most risky. Manufacturers of such products as textiles, furniture, and transportation equipment rated worst, while businesses offering educational and legal services scored best. "This is a rearview-mirror look at how bankers view loans to various industries," says LPC president Christopher L. Snyder. Still, he notes, bankers tend to be heavily influenced by past experience.
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Ten most risky Risk rating Textile manufacturing 5.47