Structuring credit facilities for short-term loans and lines of credit is more challenging for commercial bankers compared to structuring long-term loans. Since loan-term loans are utilized to fund capital asset purchases, all you need is an appraisal, evaluation, invoice, sales contract, etc. to establish the value for the capital asset, then proceed to apply your bank’s loan to value margins to set the lendable amount. For Short-term loans and lines of credit, it is not that simple.
Short-term loans and lines of credit require examination of several factors to reach the proper amount required. This is very important because underfunding or overfunding the amount a borrower requires to fund their operations can cause a problem.
Specifically, the course will demonstrate the key financial ratios to determine the financing gap, and how to utilize this data to determine the Asset Conversion Cycle and the Operating Cycle. The course will then proceed to calculate the amount required to fund the financing gap by determining the Net Working Investment and the potential sources of cash to fund the gap before bank’s funds are deployed.
Who Should Attend
All individuals involved in credit administration including, but not limited to Credit Analysts, Commercial Lenders, Consumer Lenders, Branch Managers, Loan Review Personnel, Senior Loan Officer, Senior Credit Officer, Bank Directors, and Members of the Executive Management Team.