- Teacher: George Connors
- Teacher: Jeffrey Smith
ABOUT
The Commercial Lending School delivers in-depth training in all facets of commercial credit, with an emphasis on financial analysis, cash flow versus profit, and loan structure. Cases emphasizing small and medium-sized companies are featured. Case studies are used, and active participation by the students is essential. Pre-work may be assigned at the discretion of the instructor.
Details Below:
Module 1
Introductions
- External Environment:
- Economy,
- Industry Trends,
- Market Forces
- Life Cycles of Businesses
- Internal Environment:
- Banking Climate, Bank Size and Lending Culture
- Regulatory Environment
- Borrower Funding Need
- Borrower make-up in terms of ownership, management and legal structure and historic financial performance
- Processing Loan Requests:
- Lender-Borrower Exchange
- Typical sequence between loan request and loan approval
- Collecting Borrower Information to process loan requests
- Bank’s Loan Documentation Checklist
- Borrower Mission, life cycle position, external influences
- Borrower Management and ownership
- Past Financial Performance: The Financial Statement and Tax Returns
- Borrower Financial Projections
- Underwriting Loan Requests: Measuring Repayment Risk via Financial Statement Analysis:
- 3 Components of F/S
- Historic Financial Trends
- Reading Financial Statements:
- Level of Preparation
- Balance Sheet
- Income Statement
- Statement of Cash Flows
- Notes to Financial Statements
- Review of Actual Financial Statements to be used in Case Study
- Finding and measuring the Five C’s of Credit from Business reputation and historic financial performance
Module 2
- Historical Financial Analysis Overview
- Framing Picture of Borrower
- Determining Appropriate Level of Information Required to Process a Loan Request
- Types of Business Financial Statements
- Financial Statement Components-The Detail
- Revisit it Case Study Financial Statements
- Processing Financial Statements and Borrower Information
- Who is Borrower
- Financial performance relative to loan request
- Financial Statement Analysis
- Tools:
- Spreadsheet Construction
- Common Sizing Technique
- Statement of Cash Flow Worksheet
- Ratios
- Trend Analysis
- Comparative Analysis
- Forecasting
- Tools:
Module 3
- Financial Analysis Output
- Drawing an objective analysis from the tools for processing financial statements
- Cash Flow Analysis
- Direct vs Indirect Methodologies
- Ratio Analysis
- Five Ratio Classes used in financial analysis output
- Debt Coverage methodologies
- Loan Structure vis a vis Repayment Sources
- Amazon Case-an illustration
- Homework: Read and be ready to discuss Case provided
- Mental Picture for assessing, underwriting and evaluating loan request in case study
Module 4
- Review Modules 2 & 3 highlights on processing financial information and financial analysis output around putting together an objective underwriting evaluation using case to review past financial performance
- Financial Statement Projections
- Medical Imaging Financial Projections
- Developing appropriate loan structure that captures both the Borrower request and underwriting output, and packaging this output for loan presentation/approval using the case provided
- Building mitigants to repayment risk as part of loan structure
- Defining primary and back up sources of repayment
- Collateral
- Owner(s) Guaranty and what is required to evaluate and secure a loan guaranty
For more information, contact Renee@CFTeducation.org