What Are Zombie Banks?

commercial lender

Banks and Banking


Before engaging in commercial lender negotiating with any bank, it is important to determine if they are a “good bank” or a “bad bank”. A banking description that is being seen more frequently is “zombie bank”. This generally refers to a banking institution that has a negative net worth and that would not be operational if not for government guarantees or other financial support. This concept is more relevant than most bankers care to admit, so it is important for commercial borrowers to do their own due diligence when they are looking for commercial real estate loans and working capital financing.

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