ADVANCED COMMERCIAL LENDING (Two or Three Day Session)

This course is designed for Lenders, Analysts and anyone involved in commercial credit approval. Also Analyst with experience in the credit underwriting process and commercial lending. This course will help provide a deeper understanding of analyzing the commercial borrower along with consumer expectations.

This course will begin by examining the effects of the macro – economic factors it has on the industry and adjoining businesses. Cash Flow analysis will be covered as a means of enhancing the ability of the participant to calculate, interpret and compare various cash flow analysis methods. The final objective of the course is to expose the participants to Capital Budgeting techniques which should be performed by borrowers whenever they are considering purchasing Capital (or Fixed) assets and tips for constructing an effective credit memorandum.

DAY 1

Introduction

  • The role and status of corporate banking in the world market
  • Identifying the commercial lending process and its significance to the success of the bank Analyzing Industry, Business and Management Risk

Accounting Principles and Review of Financial Statements (Not Included In Two Day Program)

  • Review of the major accounting assumptions and principles
  • Detailed analysis of accounts receivable, inventory costing methods and fixed asset depreciation methods

Credit and Ratio Analysis

  • Analysis of credit and financial ratios to determine an entity’s:
    • Liquidity
    • Leverage
    • Asset Management Capabilities

Case Study

DAY 2

Asset Conversion Cycle Analysis

  • Calculation and interpretation of the Operating and Fixed Asset Cycles and their use in determining the length of short-term and long-term financing requirements
  • Calculation of new working investments to determine how much short-term credit is required to cover the shortfall in spontaneous financing and the timing of repayment

Analysis of Borrowing Causes and Loan Structuring

  • Identify the common causes of borrowing needs
  • Differentiate between borrowing causes and stated loan purpose

Case Study

Cash Flow Analysis

  • Defining cash flow and how cash is generated or utilized from operating, investing, and financing activities
  • Review various methods cash flow can be calculated and presented

DAY 3

Financial Forecasting

  • Converting management’s assumptions into a range of expected financial performance
  • Tools utilized to develop financial forecasting

Break-Even Analysis and Sustainable Growth

  • Review methods to determine how much revenue is required in order to eliminate operating losses and to meet fixed operating costs
  • Review methods to determine the rate a borrower can grow revenue while maintaining leverage position at a given point.

Analyzing Non-Operating Companies (Not Included in Two Day Program)

  • Key financial statement factors to consider in loans secured by real property (real estate) where the primary source of repayment is the sale, leasing or renting of the real estate.

Issues in Credit Risk Administration

  • Loan documentation requirements to maximize creditor’s protection
  • Importance of assigning Credit Risk Ratings on commercial loans

Testimonials

"Jeffery did a fantastic job all week keeping us engaged in the material and involved. He was a fantastic coordinator & lead professor"

Cliff Knowlton, Prime South


"WONDERFUL!! Great Instructor, great information. Will definitely attend more of Jeffery's classes".

Ansley Oliver, Georgia Commerce Bank

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