Lending For Non-Lenders

The focus of this course will be the activities associated with Qualitative and Quantitative Analysis when underwriting evaluates a commercial lending request. This is an overview of the entire process for non-lenders.

• Describe macroeconomic factors that affect a business and its ability to repay a loan.
• Evaluate business, industry and management risk elements and their effect on loan repayment.
• Analyze key ratios including liquidity, leverage, asset management, profitability and coverage ratios.
• Evaluate sources and uses of cash on the financial statements.
• Understand the history of the cash flow statement and how it is used in credit analysis.
• Describe the difference between operating, investing and financing cash flows.
• Identify primary and secondary sources of repayment.
• Evaluate the risks associated with lines of credit, term loans, bridge loans and permanent working capital loans.
• Understand affirmative and negative covenants.
• Explain how underwriting integrates the analytical traditions of financial analysis, management assessment, and business environment into an appropriate credit recommendation.
• Outline the critical risks and how those risks are mitigated.

Anyone who wants to understand how a commercial lending decision is made.