BankerCollege

There are at least nine approaches to assessing a borrower’s cash flow available for debt service.  Each provides a different perspective on sources and uses of cash.  Each has a role in underwriting and monitoring a lending relationship.

This credit training will compare alternative approaches to cash flow and demonstrate the appropriate application of each approach in assessing and monitoring a borrower’s financial performance.  The webinar will teach participants how to determine the maximum line of credit appropriate for a borrower and the factors which will determine when it is appropriate to convert revolving debt to amortizing debt.

BONUS MATERIALS: 3 case studies to demonstrate the alternative approaches. Also, a handout detailing issues in underwriting when using EBITDA/Interest + CMLTD for calculating debt service coverage ratio.

After completing this 2-part credit training webinar, participants will be able to:

• Compare nine approaches to quantifying cash flow
• Discuss the pros and cons of various presentations of the statement of cash flows
• Define the priorities for the use of cash and when it is appropriate to reorder those priorities e.g. term out a line of credit.
• Assess the adequacy and volatility of cash flows and describe the impact on loan structure including term, collateral advance rates, coverage ratios and financial leverage
• Project future cash flows using a projection tool
• Employ the concepts in two case studies