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ARTICLE · 14 NOVEMBER 2023

OCC Issues Bulletin On Risks Related To Venture Lending

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On November 1, the OCC issued Bulletin 2023-34 addressing the topic of "venture lending," referred to as "commercial loans to early-, expansion-, and late-stage companies."

United StatesFinance and Banking
Moorari K. Shah
Moorari K. Shah
A.J. Dhaliwal
A.J. Dhaliwal
Skylar Stoudt
Skylar Stoudt
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On November 1, the OCC issued Bulletin 2023-34 addressing the topic of "venture lending," referred to as "commercial loans to early-, expansion-, and late-stage companies." According to the Bulletin, venture lending is often used to fund new business growth and development but comes with its own set of risks and challenges, and financial institutions must take care to meet the agency's expectations for risk management and risk-rating of venture loans. Key takeaways from the OCC's Bulletin including the following:

  1. Risk Management: Lenders should have effective processes to identify, measure, monitor, and control the risks associated with these loans. This includes assessing the creditworthiness of the borrowers, evaluating the adequacy of their cash flow, and closely monitoring the progress of startup borrowers.

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