CLR
Showing 113–128 of 345 results
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Take stock of inventory
April / May 2017
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 402
Abstract: A small business’s ability to track inventory and minimize errors, omissions and fraud depends on the existence of a robust inventory reporting and tracking system. This brief article defines several general elements an inventory tracking system needs to include — whether it’s manual or computerized — including inventory requisitions, receiving reports and an inventory ledger. The article also suggests that the determination of whether an inventory system is effective may require occasional site visits and interviews with owners and managers.
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High business credit scores equal affordable financing
April / May 2017
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 662
Abstract: Credit applicants with low credit scores are often surprised when they’re turned down or offered less favorable terms than expected. This article points out that lenders need to remind prospective borrowers of the importance of establishing and maintaining the highest business credit score possible. The article explains some ways businesses can stay on top of their credit score, including separating personal and business credit and paying on time. It also discusses credit reporting agencies and how they operate.
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How auditors assess a borrower’s financial viability
April / May 2017
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 548
Abstract: A CPA evaluates the going concern assumption during a financial statement audit to get a picture of a company’s financial health and viability going forward. This article describes a few items they look for during that assessment, including potential red flags like pending lawsuits and investigations, working capital deficiencies, negative operating cash flow, the loss of a major customer or franchise, loan defaults and debt restructurings. The article notes that audit opinions can offer important clues as to whether companies will continue to operate as going concerns.
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Are prospective borrowers telling the truth? Learn the warning signs associated with deception
April / May 2017
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 869
Abstract: Most borrowers respond honestly when they meet with bankers about their financial condition. But those with less than stellar records may be tempted to downplay their true economic situation. Lenders need strategies to help them determine if a loan applicant is telling the whole truth. This article offers some forensic accounting tips for uncovering exaggerations, misstatements and outright fraud when managers are suspected of dishonest behavior. A sidebar lists several questions lenders should ask if they are concerned about potential inconsistencies — or deception — on the part of their borrowers.
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3 ways to minimize risk when lending to seasonal businesses
February / March 2017
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 372
Abstract: Some borrowers, such as landscapers, hotels and toy manufacturers, experience significant seasonal fluctuations in their financial performance. But seasonal businesses still require working capital throughout the year, and often turn to banks for support during the off season. This article discusses three approaches that can help lenders assess and manage the credit risk associated with lending to seasonal businesses.
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Trust but verify: Evaluate financial restatements carefully
February / March 2017
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 641
Abstract: Misinterpretation of accounting standards or mistakes may cause businesses to reissue their financial statements. But financial restatements also can be a sign of incompetence or fraud. This article explains that lenders need to closely examine financial restatements to accurately evaluate their borrowers’ situations. The article looks at the most common reasons for financial restatements, pointing out that lenders need to dig deeper to determine whether restatements are simply correcting mistakes or potentially fraudulent.
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Timing is everything – How to measure liquidity using the cash conversion cycle
February / March 2017
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 582
Abstract: To measure liquidity, lenders traditionally look to the balance sheet and compute the current or quick ratio. This article discusses another, lesser-known metric called the cash conversion cycle (CCC), using an example to illustrate how the CCC metric functions. The article notes that using the CCC and other liquidity benchmarks together with other tools, such as leverage, growth and profitability metrics, can help a lender gain a comprehensive risk assessment.
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Is your borrower worth the risk? SWOT analysis provides answers
February / March 2017
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 815
Abstract: An analysis of a prospective borrower’s strengths, weaknesses, opportunities and threats (SWOT) can reveal whether the company is vulnerable to competitors or potential threats. This article offers some guidance to help lenders decide whether to continue to work with a troubled borrower to fix problem areas. A brief sidebar notes the importance of determining whether the borrower is willing, or unwilling, to remedy any issues revealed by the SWOT analysis.
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In the News – Beware of non-GAAP metrics
Year End 2016
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 435
Abstract: Many companies report financial metrics that don’t conform to U.S. GAAP in their business plans and other promotional materials. This article explains how these figures can sometimes cast a more favorable light on the borrower’s historic and prospective operations than the GAAP figures do. And it provides some questions for lenders to ask their borrowers about whether the use of non-GAAP figures makes sense — or whether it could potentially be misleading.
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What does it mean to operate “lean”?
Year End 2016
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 624
Abstract: Thirty years ago, “lean” manufacturing was an innovative concept — and it’s still relevant today. Lenders may need to remind their manufacturing borrowers that the secret to staying lean is continuous improvement. This article provides a brief overview of the four cornerstones for building a lean foundation.
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Nothing ventured, nothing gained – Reap the rewards of signing on new customers, but beware of the risks
Year End 2016
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 602
Abstract: Working with existing borrowers to help grow their businesses can be rewarding. But sometimes you need to branch out and pursue new lending opportunities. When you do, it’s critical to “dial up” your due diligence procedures. This article discusses the importance of site visits, Internet and social media searches, and industry research before committing to a new borrower.
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Let’s read the footnotes
Year End 2016
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 869
Abstract: Financial statement footnotes can provide a wealth of useful information. Experienced lenders know to look beyond the numbers and consider qualitative details and narrative disclosures, as well as what’s not being said. This article provides some examples of disclosures (or omissions of information) that lenders should watch out for, as well as ways to find more details. A sidebar discusses the rising popularity of sustainability disclosures.
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In the News – What the new DOL rules could mean for your borrowers
October / November 2016
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 449
Abstract: The Department of Labor issued new final overtime rules that update the thresholds for classifying workers as nonexempt and highly compensated. This article outlines changes that will go into effect on December 1 and legitimate ways to minimize the adverse effects.
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Budget vs. actual: How reliable are management’s estimates?
October / November 2016
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 670
Abstract: Borrowers often submit forecasts and budgets when they’re applying for a loan. But these estimates may be off the mark for various reasons. This article guides lenders on how to assess whether these estimates seem reasonable and to compare them to actual results in subsequent reporting periods.
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Agreed upon procedures – These customized engagements can provide valuable insight
October / November 2016
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 541
Abstract: An “agreed upon procedures” (AUP) engagement uses similar procedures to an audit, but on a smaller and limited scale and with no assurance from the CPA. This article uses a hypothetical example to explain how a customized AUP engagement differs from an audit and can be used to identify specific problems that require immediate action.
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The butcher, the baker, the candlestick maker – Adopting a customized due diligence approach
October / November 2016
Newsletter: Commercial Lending Report
Price: $225.00, Subscriber Price: $157.50
Word count: 885
Abstract: Most loan portfolios include businesses of all shapes and sizes. Before reviewing a borrower’s financial statements, it’s essential to consider the industry in which it operates. This article provides a five-factor approach to evaluating competitive forces that may help lenders anticipate future opportunities and threats. A sidebar shows how a lender might apply a scorecard approach to rate three hypothetical borrowers: a butcher, a baker and a candlestick maker.