Prompt Chain: Build a Portfolio Monitoring System with Claude

For Commercial Loan Officers

Tools: Claude Projects | Time to build: 1–2 hours | Difficulty: Intermediate-Advanced Prerequisites: Comfortable using Claude for credit analysis (see Level 3 guide: "Credit Memo First Draft with Claude")

What This Builds

A systematic prompt chain that takes your annual borrower financial statements and converts them into: (1) a covenant compliance check, (2) a financial trend analysis, (3) an early warning signal assessment, and (4) a relationship action plan. All in one Claude session. Instead of spending 2–3 hours per borrower on your annual review portfolio sweep, you run the chain and focus on the 20% of borrowers that need attention.

Prerequisites

• Claude Pro subscription ({{tool:Claude.price}}/month): Sign up
• Annual financial statements from your commercial borrowers (received for review)
• Your loan file notes (covenant requirements, original credit memo highlights)
• Ideally, the Credit Policy Assistant Claude Project (Level 4 guide) already configured

The Concept

A prompt chain is a sequence of instructions where each step builds on the previous output, like an assembly line where each station handles one part of the job. Instead of one massive prompt that tries to do everything at once, you run 4 focused prompts in sequence. Each prompt uses the output of the previous step as its input. The result is more thorough and consistent than trying to analyze everything simultaneously.

Build It Step by Step

Part 1: Gather Your Inputs

For each borrower in your annual review sweep, collect:

• Original loan terms (amount, DSCR covenant, other covenants, maturity date)
• Prior year financial highlights (for trend comparison)
• New financial statement data (income, DSCR, balance sheet)

Format this as a simple text block. You'll paste it into Step 1 of the chain.

Part 2: The 4-Step Prompt Chain

Open Claude (in your Credit Policy Assistant Project if you have it, otherwise a regular conversation). Run these four prompts in sequence for each borrower.

PROMPT 1: Covenant Compliance Check

Annual review — Covenant Compliance Check

Borrower: [Business name]
Loan: $[amount] [type], originated [date], matures [date]
Annual financial statements received: [date]

LOAN COVENANTS:
- DSCR: minimum [X]x
- [Other covenants, e.g., maximum leverage, minimum liquidity]
- Annual reporting: due [date]

ACTUAL RESULTS ([year]):
- Revenue: $[X]
- Net income: $[X]
- Debt service (annual): $[X]
- Calculated DSCR: [X]x
- [Other actual metrics]

1. List each covenant, the required threshold, the actual result, and the compliance status (COMPLIANT / EXCEPTION).
2. Note if any covenant is within 10% of threshold (early warning zone).
3. Note the reporting compliance (received on time / late / missing).

Output format: structured table, then 1-2 sentences of overall compliance summary.

PROMPT 2: Financial Trend Analysis

Based on the borrower above, analyze the financial trends:

PRIOR YEAR COMPARISON:
- Revenue: [prior year] → [current year]
- Net income: [prior year] → [current year]
- DSCR: [prior year] → [current year]
- [Other key metrics that have changed]

1. Is the financial trend improving, stable, or deteriorating?
2. What is driving the change (revenue growth vs. margin pressure vs. debt load)?
3. If deteriorating: at what DSCR would the bank need to take action?
4. Are there any line items that are unusual or warrant questions to the borrower?

Output: 2-3 paragraphs suitable for an annual review credit memo file note.

PROMPT 3: Early Warning Signal Assessment

Based on the compliance check and trend analysis above, assess early warning signals:

Rate each of these signals for this borrower (Green / Yellow / Red):
- DSCR trend: [based on prior analysis]
- Revenue stability: [growing/stable/declining]
- Covenant headroom: [comfortable/tight/exception]
- Industry conditions: [stable/challenged/distressed]
- Reporting timeliness: [on time/late/missing]
- Known business issues: [any issues you know from relationship — paste here]

1. Overall risk rating: Green / Yellow / Red (with reasoning)
2. Recommended monitoring action: [routine annual review / 90-day check-in / watchlist]
3. If Yellow or Red: what specific questions should I ask this borrower in the next conversation?

Output: bullet points for each signal, then recommendation paragraph.

PROMPT 4: Relationship Action Plan

Based on the full annual review above, create a relationship action plan for [Borrower Name]:

Loan situation summary: [paste 1-sentence summary from prior steps]
Overall risk signal: [Green/Yellow/Red from Step 3]

Create a brief action plan:
1. IMMEDIATE ACTIONS (next 30 days):
   - [What do I need to do — file a covenant compliance memo, schedule a call, update the risk rating?]
2. RELATIONSHIP CALL AGENDA (for my next borrower call):
   - [3-5 specific questions to ask this borrower based on the analysis above]
   - [Any cross-sell opportunities based on their financial position]
3. DOCUMENTATION NEEDED:
   - [What goes in the loan file based on this review]

Keep it practical — this goes into my CRM as the action plan for this borrower.

Part 3: Process Your Full Portfolio

Work through your annual review borrowers systematically. For each borrower:

1. Run all 4 prompts in sequence (start a new Claude conversation for each borrower)
2. Copy the outputs into your loan file or CRM
3. Color-code borrowers by risk signal (Green/Yellow/Red)
4. Address Yellow and Red borrowers first

Batch strategy: Process 5–8 borrowers per Claude session. After completing the chain for one borrower, continue in the same conversation for the next borrower by saying "New borrower, same chain" and pasting the next set of data.

Real Example: Full Portfolio Sweep

Setup: It's February. You have 28 commercial borrowers due for annual review. You've received financials from 22 of them.

Session 1 (Monday morning, 90 minutes): You process 8 borrowers through the chain. Results:

• 6 Green (routine: file the compliance memo and move on)
• 1 Yellow (DSCR declined from 1.41x to 1.22x; covenant still met but trending toward threshold)
• 1 Red (DSCR exception at 1.12x, below 1.20x minimum; needs watchlist memo)

Time spent: 90 minutes for 8 borrowers, each with a complete covenant compliance summary, trend analysis, risk assessment, and action plan.

Traditional approach: 2–3 hours per borrower = 16–24 hours total.

Output: For the Yellow borrower, the action plan includes: schedule a call to discuss revenue decline, ask about key customer retention, update risk rating to watch, 90-day re-review. You have the exact questions to ask, drafted and ready.

What to Do When It Breaks

• Claude forgets prior steps in a long session → Start a new conversation for each borrower. Don't run 20 borrowers in one conversation.
• Financial data is in PDF format → You'll need to manually type the key metrics into the prompt. Consider asking your admin to extract key figures from PDFs into a standard spreadsheet for your review season.
• DSCR calculation differs from spread → Always use your own calculated DSCR from the spread. Paste the result into the prompt rather than asking Claude to calculate from raw numbers.
• Action plans are too generic → Add more context to Prompt 4: paste your most recent call notes with that borrower, their industry situation, and any known business changes.

Variations

• Simpler version: Use only Prompt 1 (covenant compliance check). This alone saves significant time versus manual documentation, even if you skip the trend and relationship steps.
• Extended version: After processing all borrowers, run a portfolio-level summary: "Based on all the annual reviews below, give me: total Green/Yellow/Red count, the top 3 concentration risks in my portfolio, and a 1-paragraph portfolio health summary for management." Paste all 28 borrower summaries and let Claude aggregate.

What to Do Next

• This week: Run your next 3 annual review borrowers through the full 4-step chain and compare to your usual process.
• This month: Process your entire annual review portfolio; build a standard format for the financial data input so setup takes 2 minutes per borrower.
• Advanced: Combine with the Credit Policy Assistant Project. Load your bank's watchlist criteria and risk rating definitions so the chain automatically applies your institution's standards.

Advanced guide for commercial loan officer professionals. These techniques use more sophisticated AI features that may require paid subscriptions.