How many times have you approved and made available a Revolving Line of Credit for a prospect or customer who ultimately borrows up to the maximum credit limit and keep the balance at that point all year. When this occurs, it is often referred to as an “Evergreen”, “Floored-In” or “Permanent” Line of Credit and is often frustrating to bankers. In order to be repaid, bankers must convert all or a portion of the line into a term loan and choosing the right amount to convert is a guessing game in many cases.

This session will examine in detail what causes a borrower’s short term Line of Credit to become permanent working capital. Some of the reasons may be intentional while others are unintentional. This session will help you to distinguish between the two and provide a deeper understanding of the impact and interrelationship of sales, current assets, profits, cash flow and creditors on the Line of Credit.

Specifically, the session will address the following issues:

  • How to educate borrowers on the proper use of a Line of Credit
  • How to determine the proper amount of a Line of Credit
  • What causes a Line of Credit to become permanent working capital
  • Analysis of the Asset Conversion Cycle to determine the impact on borrowings under the Line of Credit and to properly structure credit facilities
  • Analysis of accounts receivable and inventory to determine collectability and quality.
  • • Methods to determine how much of the Line of Credit should be converted to a term loan at maturity

After attending this session, the participant will be able to notice the warning signs of a Line of Credit that is rapidly becoming permanent working capital and the analysis required to avoid this from occurring. The participants will also have an enhanced understanding of how to structure short term credit facilities to achieve maximum safety and efficiency for the borrower and the bank.


"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

Read more