There are many commercial financial products and credit instruments available to businesses. There is no shortage of commercial loan products available to the business owner. The issue is, what is best for their needs? Assuming your institution has the credit instruments, we will try apply the best for our customer's needs in this module.

Description:

In most cases, business owners require capital for a variety of needs in a business. However, what best serves the customer for their financial needs. Not all debt is alike because it is relevant to their strengths and weaknesses. In Week 6, we will begin at a good starting point to make a decision on what Credit Structure has the most utility to the business owner as well as how we can mitigate our Risk.

Purpose:

Determine the Credit Structure of our business owner's needs that mitigates Risk in our Portfolio.

What to gain:

A deeper insight into the following:

What a business break-even analysis tells us about the financial and credit need of our customer
Re-examine DSCR from the Income Statement and Balance Sheet
How to interrupt a business break-even and help in our credit analysis

Upcoming activities:

There is no magic bullet in credit analysis. However, calculating a business break-even can be very helpful in analyzing how the income statement, balance sheet and cash flow statement work together in Forecasting Cash Flows to give us confidence in the Credit Structure of a business.

For this week, we will review, analyze, discuss and have a quiz over these returns. We will be focusing in on a privately held company and discussing the credit quality of a loan request as an analyst.