The rules under Illinois’s basic lending limit provisions require you to treat loans made to “A” as if they were made to “B” if you relied on the credit worthiness of “B” when making loans to “A.” In such cases, the loans made to “A” must be added to the loans made to “B” when determining whether you have loaned “B” an amount in excess of Illinois’ 25% lending limit. The Illinois Banking Act also requires the liabilities of a partnership or joint venture to be aggregated with the liabilities of the members of the partnership or joint venture when assessing compliance with the lending limits.

In the case of your bank’s loans to five different companies, you need to determine whether you have relied on the credit worthiness of any of the companies in making loans to any of the other companies, and if so, then you must aggregate the loans accordingly. The rules list various factors that you may consider in determining whether you have relied on one company’s credit worthiness in lending money to another company. At the same time, keep in mind that the Illinois Banking Act excludes certain types of debt from the lending limits.

National banks need to be aware that the OCC has a different set of lending limit regulations, which include rules on combining loans to different individuals and entities under either a “direct benefits” or a “common enterprise” test. These combination rules generally do not apply to state-chartered institutions.