1. The main function of a bank is to collect funds from surplus units, which are people who have excess funds (depositors), and to lend to deficit units, which are people who are in need. of funds to finance a need (borrowers). The main reason a bank lends is to make a profit. Banks accept deposits and in turn pay interest on these deposits. A bank is not able to pay interest if it does not have a source of income or a way to make a profit. In addition to paying interest, a bank has demands on its staff, shareholders and society. When lending funds, the bank presents a risk not only of interest payable, but also of loss of the depositor's initial funds. Therefore, the loan process is a crucial decision among lenders due to the risk involved. “The general principles of good lending, or the canons of lending, if applied consistently with a structured, analytical approach and good judgment, will reduce the risk of lending to the customer. » Lending standards are guidelines that lenders follow to assess the creditworthiness of a potential customer or borrower. There are many different lending canons, from Campari to the 5 Cs to analyzers to parts, but they all have the same components and information needed to complete an assessment and help make a credit decision. When completing an assessment for Mr. and Mrs. Shepherd, I will use the Campari loan tool barrel to make a decision on their proposed application. Character - Mr. and Mrs. Shepherd are husband and wife and both 45 years old. They are new customers of our bank, but have indicated that they are good, long-standing customers of their existing bank and are seeking financing through our bank as their existing bank does not have a local presence in Scotland . They have no experience in the hospitality industry, but Mr Shepherd is a freelance illustrator, who also has experience as a salesman and Ms Shepherd has experience in the catering industry. Capacity - Mr Shepherd said he earned £60,000 per person. year of his activity as an independent illustrator, which he seeks to continue doing while managing the hotel. Both Mr and Mrs Shepherd are seeking to run the hotel together as a partnership; however, they have no experience in this area. Based on profit and loss statements provided by the hotel's former owner, the hotel appears stable and has only seen a drop in profits over the past year due to his illness..