Credit memo automation: the full memo drafted from the spread and the file, every number cited
A cited first draft the same day, not after days of pasting.
See one case, screen by screen ↓Software that writes the credit memo for you once the spreading is done — request, borrower, industry, financial analysis, cash flow, collateral, guarantors, structure, exceptions, risks, grade and conditions. Credit Memo Automation uses six agents to write every section in your bank’s own template from the approved spread and the deal file, with every number cited to its page.
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Once the statements are spread, the credit work is only half done. The memo still has to be written — request, borrower and management, industry, financial analysis, business and global cash flow, collateral, guarantors, structure, policy exceptions, risks and mitigants, risk grade, conditions — usually by pasting tables from the spread into the bank’s template and describing the file again in words.
Then the deal moves. The relationship manager changes an amount, the CPA sends the K-1s, a rate is repriced, and every number that depended on the old figure is somewhere in fourteen pages. The analyst hunts for each one by hand, and the underwriting manager reading 1.60x cannot see where it came from without opening the spread and the file.
Estimated split for a typical middle-market memo, in days, by hand and with the solution.
Six specialist agents write, cite and keep every section in step with the spread; the credit analyst edits, accepts and sends.
Brennick Precision Components, a CNC machining shop and a customer of Halvern Bank & Trust since 2014, asks for $19,000,000 across three facilities. Here is the memo being written and changed, screen by screen, in the working solution.
Hannah approved spread v3 on Friday at 16:48; two minutes later the file reader marked the deal file complete — 38 documents, 412 pages. The memo opens in the bank’s Commercial credit memo v2026.2 template with all 12 sections waiting, and the documents each section will be written from already in the margin.
“Everything the memo needs is in.”
The sections fill in order while the run log shows each agent’s work: the file reader indexed 1,906 figures with their page; the spread and cash flow analyst took spread v3 — cash available for debt service $3,880,000, DSCR 1.60x, global 1.42x. Structure, covenants and pricing come with the cushion on each covenant and the relationship return.
The recommendation reads like the bank wrote it: $19,000,000 in a renewed $8,000,000 revolving line, a $6,800,000 equipment term loan and a $4,200,000 real estate term loan, guaranteed by Daniel Brennick and Laura Brennick-Ortiz. Two policy exceptions are found and mitigated, and risk grade 5 — Acceptable — is proposed. Above the CCO’s $15,000,000 authority, so it goes to loan committee.
“Memo writer done · 14 pages · 113 numbers, each with its page.”
In the collateral table Hannah clicks the plant value. The drawer opens the Lakeshore Valuation Group appraisal of 2250 Ironwood Industrial Drive at page 2 of 86, with “Final value, as is, fee simple — $5,400,000” highlighted, and lists the sections that cite it: §2, §6 and §9. That value is why the real estate loan to value is 77.8% against a 75% maximum.
Daniel Brennick’s personal financial statement lists $1,920,000 of liquid assets; his brokerage statement of 31 August shows $1,410,000, after a $520,000 withdrawal on 14 July for a house build. Hannah uses the verified figure and records why. Combined guarantor liquidity is $2,040,000 against the $1,900,000 the policy needs — 10% of guaranteed debt, §6.2.
“Two documents in the file disagree. The agents use neither until you choose.”
Vandermolen & Pike CPAs send the 2025 K-1s: tax distributions were $1,717,000, not the $1,050,000 the interim statements estimated. Hannah types the figure into spread row 55. Spread v4: cash available for debt service falls to $3,213,000, DSCR to 1.32x, global DSCR to 1.18x, the EBITDA −20% stress to 0.82x — and the recommendation rewrites itself with the new figures.
“12 numbers updated and 3 paragraphs rewritten in 7 sections; a new exception and its mitigant added. Nothing is final until you accept.”
Global coverage of 1.18x is below the 1.20x minimum in policy §4.2, so exception 3 appears in §9, and §10 gains a new risk: cash flow after distributions. The mitigant suspends $480,000 of other distributions until global coverage is at least 1.25x for two consecutive quarters — business coverage 1.52x and global 1.35x without them. Both passages are marked “New · from spread v4”.
Facilities and pro forma debt service of $2,430,581, each policy limit as a bar — global coverage 1.18x, real estate loan to value 77.8% and inventory advance rate 55% flagged as exceptions — the stress cases, and the table of every figure that depended on the change, before and after, with the section and source.
The weighted scorecard is 5.05 and rounds to 5, from 4 in the October 2024 memo. The move comes from leverage — 2.97x pro forma against 1.71x a year ago — and from coverage of 1.32x once the K-1 tax distributions are in. The grade is a proposal: Martin Asher and the committee set the final grade.
“Proposed · the approver sets the grade.”
At 09:08 Hannah accepts the 12 updated numbers and 3 rewritten paragraphs. All seven readiness checks pass — 130 of 130 numbers cite a page, no open conflicts, the latest figures in the spread, every change accepted, every exception mitigated — and she sends the memo to Renee Dubois for review, due today at 17:00, on its way to Thursday’s loan committee with three exceptions.
The same Brennick memo, seen by the four people who carry it to committee — what their week looked like, and what it looks like now.
Six specialist agents write, cite and keep every section in step with the spread; the credit analyst edits, accepts and sends.
Reads every document in the deal file — statements, tax returns, personal financial statements, appraisals, field exams, quotes — and indexes each figure with its page.
Takes the approved spread and computes ratios, business and global cash flow, pro forma debt service and the stress cases.
Drafts each of the 12 sections in the bank’s own template from the spread, the file and the prior memo, with every number and claim cited.
Tests coverage, global coverage, leverage, loan to value, advance rates and guarantor liquidity against credit policy, and lists each exception with its section, the actual, the limit and who approves it.
Scores the commercial scorecard and proposes a grade on the bank’s 1–9 scale, with the reason for each factor.
Keeps the memo in step with the spread: when a figure, amount, rate or term changes, it finds every number and passage that depends on it, has them recomputed and rewritten, re-runs the policy test and marks each change.
Owns the memo; the underwriting manager reviews, the committee decides. The agents propose; a named person decides.
Ask where any number in the memo comes from, what a spread change rewrites — or why a passage says what it says. Every answer points to its source.
Where does the cash for debt service come from?
From spread v3, trailing twelve months to 30 June: EBITDA $6,050,000, less unfinanced capital expenditures of $640,000, tax distributions of $1,050,000 and other distributions of $480,000 — $3,880,000 for debt service. Against pro forma debt service of $2,430,581 that is 1.60x against the 1.25x minimum, and 1.42x globally against 1.20x.
Why is Daniel Brennick’s liquidity $1.41M, not $1.92M?
His personal financial statement of 30 June lists $1,920,000 of cash and securities. His brokerage statement of 31 August shows $1,410,000, after a $520,000 wire on 14 July for a house build. Policy §6.2 asks for verified liquidity, so the later third-party figure is the one to use. With Laura’s $630,000, the guarantors hold $2,040,000.
What does the memo say if tax distributions are $1,717,000?
The CPA’s 2025 K-1s put tax distributions at $1,717,000, not the $1,050,000 estimate in the interims. Cash for debt service moves from $3,880,000 to $3,213,000, DSCR from 1.60x to 1.32x, global DSCR from 1.42x to 1.18x and the EBITDA −20% stress from 1.10x to 0.82x. Global coverage falls below the 1.20x minimum: a new exception, and §10 gains a mitigant.
How does the mitigant restore global coverage?
Other distributions of $480,000 are suspended until global coverage is at least 1.25x for two quarters. Without them DSCR is 1.52x and global DSCR 1.35x. Tax distributions of $1,717,000 stay: they are the owners’ tax on the company’s income, and the shareholder agreement requires them. The condition is in §12.
13 screens from the working solution, on its sample data. Pick one to see it large.
The template, policy limits and approval rules every memo is drafted and checked against are settings. Changes are versioned and on the change log.
| Setting | Default | Choose from |
|---|---|---|
| Memo template | Commercial credit memo v2026.2 · 12 sections | Your template; 12 sections in the working solution |
| Every number must cite a page | On | On · off |
| Conflicting sources | Raise to the analyst, use neither | Raise to the analyst, use neither · use the most recent verified document · use the lower figure and note it |
| Debt service coverage, minimum | 1.25x · global minimum 1.20x | Any minimum, set with − and + |
| Senior funded debt to EBITDA, maximum | 3.00x | 3.00x · 2.75x · 3.50x |
| Owner-occupied real estate, maximum loan to value | 75% of as-is appraised value | 75% · 80% · 70% |
| Stress cases | EBITDA −10%, −20% · rate +200 bps | EBITDA −10%, −20% · rate +200 bps, or EBITDA −25% · rate +300 bps |
| Approval authority | Underwriting manager review · CCO to $15,000,000 · loan committee above | Reviewer Renee Dubois or Jonah Reyes · CCO limit $10,000,000, $15,000,000 or $20,000,000 |
Every figure is labelled: a target the solution is built to, an estimate, a typical published result, or a proven one.
“demo” = seen in the working solution, on its sample deal · “target” = the design goal, measured in the live solution · “estimated” = our estimate · “typical” = published figures (Moody’s automated credit memo, Taishin case — 20 hours to 4 per corporate credit report; Community Bankers Association of Georgia, Ensuring Commercial Lending Stability, 2025 — memo writing takes “another few days” after data entry, and a 6.5% error rate for single data entry in spreadsheets, NCBI 2008, cited there). People, banks and companies named on this page are fictional — characters and sample data in the working solution.
Software that writes the credit memo for you once the spreading is done — request, borrower, industry, financial analysis, cash flow, collateral, guarantors, structure, exceptions, risks, grade and conditions. Credit Memo Automation uses six agents to write every section in your bank’s own template from the approved spread and the deal file, with every number cited to its page.
Yes. The memo template and its sections are a setting; the working solution uses a 12-section commercial credit memo. The memo writer can carry forward the borrower and management text from the last approved memo, and says when it has.
Every number in the draft is underlined. Click it, a source chip or a whole sentence and the page it came from opens with the figure highlighted, along with the other sections that use it. A memo with an uncited number cannot be sent for review.
Type a new figure into the spread and the consistency checker finds every number and passage that depends on it, has them recomputed and rewritten, and re-runs the policy test. Each change is marked in place, and nothing is final until the analyst accepts — or presses Undo to restore the accepted memo.
No. The policy checker lists each exception with its policy section, the actual, the limit and who approves it, but never waives or approves one. The risk grader proposes a grade on the bank’s 1–9 scale with reasons; the approver sets the final grade.
When two documents give different values for the same figure — a personal financial statement and a later brokerage statement, say — the agents use neither. The analyst chooses, and the choice and its reason are recorded on the change log.
Yes. The credit analyst owns the memo and accepts every agent change; the underwriting manager reviews every memo before it goes to an approver; the Chief Credit Officer and loan committee decide within their authority.
The Agentic Solution Engine builds and deploys it from your requirements — your memo template, your credit policy and a sample of past memos and deal files — and it goes live once every quality gate has passed. We will show it on one of your own approved spreads first.
Every related entity spread in hours, each number linked to its page.
1-min demoCommercial Loan OriginationFiles ready for underwriting in days, not weeks of chasing documents.
1-min demoCovenant MonitoringEvery breach seen the day it happens, not at the annual review.
1-min demoWe’ll draft a memo from one of your own approved spreads and deal files.