Business Lending Certification Institute: Credit Analysis Topics

Vin DiCara

 Review of the Business Credit Analysis Process

  • Explore how to use tax returns as the basis for analyzing creditworthiness
  • Identify the differences between tax returns for various types of businesses
  • Learn what to focus on and what you can ignore in tax returns
  • Realize the hazards of using interim financial information and the need to reconcile that information with end-of-the-year tax returns

Analyzing Business Tax Returns

  • Explore how to use tax returns as the basis for analyzing creditworthiness
  • Identify the differences between tax returns for various types of businesses
  • Learn what to focus on and what you can ignore in tax returns
  • Realize the hazards of using interim financial information and the need to reconcile that information with end-of-the-year tax returns

Repaying Loans

  • Explore the advantages and disadvantages of repaying loans with cash flow, personal guarantees and collateral
  • Discuss personal financial statements as an indicator of the personal financial strength of business owners and other guarantors

The Cash Flow Statement

  • Explore the information contained in cash flow statements and use it to identify how a business is generating and using cash
  • Differentiate the definitions of cash flow

Financial Projections

  • Understand financial projections as a tool in the credit analysis  process
  • Discover how to test business assumptions
  • Learn how to develop projections for balance sheets, profit and loss statements and cash budgets

Financial Sources for Startup Businesses

  • Discuss how to modify common credit analysis techniques for start-up businesses
  • Explore a variety of start-up issues including: typical sources of capital, the role of angel investors and venture capital and analyzing a business with no history
  • Understand the need to rely on projected financial information, equity contribution, owner financial

How to Finance Fast Growth Businesses

  • Understand the financing requirements of fast-growth businesses
  • Explore permanent working capital, an index of sustainable growth and other analysis tools
  • Identify when to use short and long-term loans

Debt Financing from Non-Traditional Sources

  • Discover how private and public non-profit loan programs can assist conventional private sector lenders to fill financing gaps 
  • Become familiar with the types of loan incentives available through organizations such as the Small Business Administration, U.S. Department of Agriculture and regional development

 Types of Financing and Loan Covenants

  • Learn how to structure deals with non-traditional debt
  • Explore the different financing instruments and their applicability
  • Understand how to use loan covenants to protect your credit union
  • Discuss loan types, lines of credit, term loans and asset based lending

Case Study

  • Analyze real loan applications
  • Determine structure and terms
  • Investigate red flags and issues

 

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