That's a very tough question. How do you define “creditworthy” when banking is an art much more than a science?
There are elements in creditworthiness. Prior to the beginning of the recession 12 months ago, a company could have been profitable and it could have had a leverage that was reasonable. It could all of a sudden face not being profitable and still be creditworthy. It is the judgment of the banker, and that includes my judgment. When I look at a company's creditworthiness, I look at the ability of this company to withstand the next two years as a recession. Even if they lose money, profitability is only one criterion; it's not the only criterion. It's also the leverage of the company.
Now, if the company was losing money before the recession, please understand that that makes it very hard for the company to be creditworthy. If they weren't capable of being profitable when the environment was absolutely positive, what makes us think they will be profitable over the next two years and beyond?
So creditworthiness is looking at a combination of factors. Leverage means how much debt they have on their balance sheet. If they are fully loaded, 100% of their assets.... It's like your mortgage. If you have 100% of the value of your home in a mortgage, you have absolutely no room to get a loan against your house if you lose your job. Your leverage is too high. However, if your mortgage is 50% of the value of your home and you lose your job, you can probably go to your bank and say you want to raise your mortgage to 60% or 70%. You're able to get a bit of working capital out of that.
It's the same principle for a balance sheet of a company. If a company's leverage is so high that you cannot give them the additional working capital they need and they weren't profitable before the recession, chances are they're not going to survive this. Their creditworthiness could be challenged.