2019 CBAO Commercial Lending and Underwriting Bootcamp
February 6, 2019 - February 7, 2019
Registration is $595 for CBAO members, $895 for non-members
Single day registration is available for $295 for CBAO members, $449 for non-member
Program Description: If you are a lender or credit analyst, are you ready to improve your skills? If you manage or review commercial relationships, what are the keys to monitoring borrower performance after the loan has been closed? How do you effectively and efficiently write up the initial underwriting and loan recommendation? What should be discussed in an annual review or renewal?
This two-day course has the answers, with a focus on effective initial structuring and subsequent monitoring of commercial lending relationships. It goes beyond the basics of financial analysis to provide portfolio management tools to influence both credit quality and profitability. We’ll unlock the mysteries of loan agreements and covenants to improve monitoring of existing credits and enhance future underwriting and renewals. Time permitting, we finish with a set of unconventional problem loan warning signals to better assist lenders in getting an early jump on a potential weakness.
Day One: Loan Structuring, Loan Agreements and Covenants
Commercial lending involves many types of loans and credit facilities. Equally diverse are the various cash needs of businesses, such as operating funds, plant expansion or equipment purchases. Documentation can range from a simple note and security agreement to a more complex loan agreement with financial covenants. In structuring a financing arrangement, the banker must have a thorough knowledge of the available credit facilities and how to match them to the customer’s needs.
This portion of the bootcamp provides bankers with a working knowledge of the basic principals of loan structuring and loan agreements, including:
- Understanding your bank’s goal(s) in structuring the loan
- Identifying the goals of your customer and the resulting credit needs
- Discussing and implementing the products you can utilize
- Identifying the loan structures that best match the source(s) of repayment
- Applying these concepts (using cases) in four key loan types: seasonal, bridge, term and operating lines of credit
- Reviewing common mistakes and lender errors in the four key loan types
- Understanding the typical structure, format and goals of loan agreements and covenants
- Developing, setting and monitoring financial covenants
- Brief overview of a borrowing base and other asset-based lending concepts used for underwriting and monitoring traditional operating lines of credit
Day Two: Loan Policy, Portfolio Management and Creating Loan Packages
The commercial lending process starts with a clear understanding of how your loan policy drives all the steps. We’ll look at key issues addressed by loan policy and how it results in your system for assigning credit risk ratings. In addition to the financial performance of the borrower, successful portfolio management involves tracking and assessing many non-financial factors.
Despite our automated and digital world, we ultimately have to make a written discussion that includes the financial and non-financial issues with a lending relationship. And this may be the most difficult, but also most important part of the process.
This portion of the bootcamp provides bankers with these tools:
- Finding the key drivers of your bank’s loan policy and how to improve your understanding and compliance
- Why are credit risk ratings important, especially in terms of timely adjustment
- Assessing industry, market and management risk and their effect on financial results of C&I borrowers and as part of an overall credit risk rating
- Assessing similar, qualitative aspects of CRE borrowers, including key issues in lease agreements
- Managing commercial relationships and a lender’s portfolio to improve both credit quality and revenue opportunities
- Tips for utilizing global cash flow
- General business writing issues that apply to commercial lending
- Eight qualities of effective business writing
- Case example of the qualities
- Understanding your purpose and audiences
- Issues in communicating quantitative information and numbers
- Effective use of “cover pages” in a loan package
- Tips for better credit memos
- “Master” format with just about anything you would ever need to mention
- Examples of wording and formats (one “before” and “after”)
- Watch what you write for lender liability issues
- Intellectual commitment and discipline in the process
- (Time permitting/Appendix) Recognizing (early) potential problem loans
Who Should Attend: Community bankers, small business lenders, private bankers, commercial lenders, loan review specialists, lending managers and credit officers in the commercial lending process.
Meet our Senior Lender Forum Facilitator:
Richard has been training bankers for 27 years, designing and delivering courses specializing in commercial lending and credit, including portfolio and risk management, commercial real estate (CRE) and appraisals, plus selling and negotiating skills, and director training. During his banking career, he was active within RMA’s chapter structure and served on several committees at the national level. Richard is a facilitator at Barret School of Banking and the Graduate School of Banking at Wisconsin. He has published 20 articles in The RMA Journal.
If you are having issues with registering online, please contact CBAO's Education & Training Coordinator, Lianne Simeone, (614) 610-1877.