Q:

What is a bank comfort letter?

A:

Quick Answer

According to Investopedia, a bank comfort letter outlines the ability of a person to pay their debts to a debtor. Banks use this letter to support a borrower's ability to repay a loan. Comfort letters are solvency opinions, not guarantees that the debtor will meet the obligations of the loan.

Know More

Full Answer

An underwriter may use a comfort letter as a means to further investigate a potential borrower prior to issuing securities. The letter follows the generally accepted accounting principals, also known as GAAP, and assures reporting of financial data otherwise missing, like a change in financial statements or unreported audits, Investopedia notes.

Learn more about Banks
Sources:

Related Questions

  • Q:

    Is Comerica Bank a good bank?

    A:

    Comerica Bank has mixed reviews from customers, according to ConsumerAffairs.com and Credit Karma. Bank customers wrote positive reviews of the services offered by Comerica Bank, but others complained about various problems encountered with their accounts or debit and credit cards.

    Full Answer >
    Filed Under:
  • Q:

    What is a development bank?

    A:

    Development banks provide capital to companies and organizations when raising money for ventures is difficult, particularly in countries where investment capital tends to be scarce. National development banks provide an important alternative to companies and projects that find it difficult to raise money to finance an endeavor.

    Full Answer >
    Filed Under:
  • Q:

    What is Comenity Bank?

    A:

    Comenity Bank is a bank that provides financing for a number of different credit cards. These cards are generally issued by retail stores, including Victoria's Secret, New York and Company, Virgin America and Woman Within. The company has over 34 million customers via 125 cards, as of April 2015.

    Full Answer >
    Filed Under:
  • Q:

    What is a capacitor bank?

    A:

    In electrical engineering industries, a capacitor bank is a group of several capacitors connected with one another. These capacitors must be identical and connected in either a parallel or series formation. Capacitor banks are used for different purposes, but usually to correct a fault within the system, such as lag or phase shifts. These banks can also be used simply to increase the energy storage of a system.

    Full Answer >
    Filed Under:

Explore