Summary
Creating a constructive loan isn’t an easy task. It’s important to meet the needs of the borrower to ensure that they have the means to repay the loan, but also protect the lender.
The loan needs to have just the right strategic repayment set up to allow the borrower to steadily pay it back without falling into financial hardship. However, the lender needs to receive just enough back in interest to justify paying out the loan and have the assurance that they will receive a return on their investment.
A loan agreement works on various factors. These are, the payment amount and dates, the purpose of the loan, the collateral put up against the loan, and the consequences of failure to make payment.
A lender will also need to do their homework in regard to risk and mitigation tactics to avoid the loss of earnings. Loan structuring within a business is a complex area and financial professionals will need to understand the inner workings of capital management, loan structuring, and covenants in order to strategically loan and take advantage of sensible investment opportunities.
- To identify the key risk areas when embarking on a loan.
- To develop accurate insights into strategic loaning to avoid risk.
- To understand the terminology surrounding modern loan assessments.
- To create a cash flow chart of your own organisation.
- To measure and quantify the borrowing needs of others.
- To benchmark your organisation against competitors in regard to lending.
- To understand the differences between short-term and long-term loaning.
- To select the appropriate lending structure for the borrower.
- To manage a loan throughout its term.
- To accurately and legally document each section of the loan agreement.
This course is designed for anyone who is responsible for making financial decisions within an organisation. It would be most beneficial for:
- Business Owners
- Chief Financial Officers
- Financial Professionals
- Operations Managers
- Directors
- Risk Assessors
- Accountants
- Account Managers
- Auditors
- Treasurers
- Funding Managers
- Bond Credit Analysts
- Data Analysts
- Management Consultants
- Investment Managers
- Lenders
- Compliance Officers
- Bank Managers
This course uses a variety of adult learning methods to aid full understanding and comprehension. Participants will review the structure of several real-life loans and work together to identify the most appropriate people to lend to and structure their repayment strategy.
They will review some of the most up-to-date tools used in the financial sector and use them to understand how much return their organisation could get from investing in loan practices at short-term, medium-term, and long-term levels.
Course Content & Outline
- What is credit risk and how to identify it?
- The various types of risk.
- Sovereign, counterpart, corporate, retail, and systemic risks.
- The current lending environment and associated risk elements.
- Assessing, measuring, and managing risks.
- IFRS impacts.
- Basic lending definitions.
- Your policies, procedures, and strategies.
- Data collection, monitoring, and approval processes.
- Long-term loans and overdrafts.
- Project and construction financing.
- Private vs. public partnerships.
- Government bonds.
- Equity and mezzanine debt.
- Working with derivatives and exposures.
- Off-balance sheets.
- Trade financing, mortgages, and credit cards.
- Understanding the mechanics and terminology.
- Seasonal cycle management.
- The role of banking finance and overdraft management.
- Break-even and cash flow analysis.
- Lending in support of the capital cycle.
- Managing multiple cycles simultaneously.
- Appraisals and credit assessments.
- Understanding the different types of clients.
- Development finance and project finance.
- Budgets and cash flow measurements.
- SWOT analysis.
- Determining the length of the loan.
- Data collection and evaluation.
- Understanding collateral.
- Recovery mechanisms.
- Measuring credit risk on specific loan types.
- Contagion and liquidity assumption risks.
- Short-term and long-term finance options.
- Working capital.
- The importance of time.
- The Rule of 72.
- NPV & PDV discounted cash flows.
- Pitfalls and stress testing your strategy.
- Scenario analysis against banker’s cash flow.
- What facilities can you offer?
- What does your client need?
- Matching lending to cash flow and securing against collateral.
- Lending cycles in the current economic climate.
- Recovery management and monitoring.
- Bank safety nets and risk transfers.
- Guarantees and other security methods.
- Best practice lending and post-draw-down techniques.
- Security management and perfection.
- Undertakings and managing your loan agreement.
- Reporting processes and regular monitoring.
- Securing accurate data and intelligence.
- Covenants and the ideal.
- Employing the best systems and CRM.
- Credit risk management processes, procedures, and auditing.
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