Commercial Lending Training Course

Why select this training course?

Commercial lending refers to the relationship created when an institution such as a bank, finance firm, credit union, or corporation lends credit to a different corporate or business entity with a predetermined interest rate. Lending is a crucial part of any financial institution that deals with credit, and lending money to commercial clients is a major part of the economy. It provides a great source of profits to corporate lending while at the same time giving those who are borrowing a chance to grow. It is, therefore, important to understand how to do it properly.

How does commercial lending work?

Commercial lending is providing loans to businesses for various purposes, including working capital, investment in equipment or real estate, or financing for growth or expansion. Here is how commercial lending works:

• Borrower identification and qualification
• Loan application
• Loan underwriting
• Loan approval
• Loan disbursement
• Loan repayment

What are the factors in determining commercial lending interest rates?

Commercial lending interest rates are determined by several factors, including:

• The creditworthiness of the borrower
• Loan amount and terms
• Economic conditions, such as inflation and interest rates
• Market competition
• Purpose of the loan
• The lender’s assessment of the risk

The Commercial Lending Training Course from Rcademy will give professionals a perspective on assessing credit risks when such lending occurs. It will befit lenders, underwriters, and analysts who want to be recognized as industry experts worldwide. Those professionals will be involved in various activities, from building a comprehensive loan structure to analyzing loan requests. Some key areas that this course will cover include collecting the right information from prospective customers to subsequently approve funds disbursement, measuring credit risk, analyzing a financial statement, understanding the message in credit reports, and accurately determining the eligibility of the loan borrowers. The professionals will gain the required skills and knowledge to establish and expand their professional knowledge.

Who should attend?

The Commercial Lending Training Course from Rcademy is ideal for the following professionals:

• Commercial and corporate lenders
• Branch managers
• Commercial credit officers
• Middle-market client-facing staff
• Relationship manager
• Corporate loan analysts
• Treasury managers
• Underwriters

What are the course objectives?

The Commercial Lending Training Course from Rcademy has a goal of enabling participants:

• Define commercial lending
• Understand in-depth loan borrowing analysis and projecting performances to determine cash flow quality, sustainability and accuracy
• Recognize the types, processes, and procedures for bankers to acquire different information types during business development
• Discuss conventional commercial lending versus SBA lending
• Discover various ways to integrate qualitative and quantitative information to develop test hypotheses about the risk factors that most lenders face
• Apply the learned knowledge to evaluate the risks related to the borrowing scenario in businesses and how they affect their overall performance
• Identify the sources of repayment and determine how appropriate they are for various commercial loan borrowing
• Understand fully the underwriting process for a commercial loan, including financial statement analysis
• Understand how to develop loan structure, loan documentation and proper loan pricing
• Identify the causes of problem loans and steps to resolving them
• Develop the necessary skills for credit assessment and investigations
• Review and understand the process of negotiating commercial loans, the sources of commercial loans, and the legal requirements in any commercial loaning process
• Apply the skills learned to make better loan procedures and policies
• Understand loan covenants and agreements
• Identify and describe the seasonal borrowing need repayment sources, profile seasonal repayments and understand their risks
• Identify and explain the loan negotiation process
• Explain the main objective and purpose of loan covenants and identify specific examples of covenants that meet those objectives

How will this course be presented?

Like all Rcademy courses, this course will be facilitated by expert professionals using the following methods:

• Presentations
• Short videos
• Lecture notes
• Discussion
• Exercises
• Case study

What are the topics covered in this course?

Module 1: Credit Risk Analysis and Measurement

• Credit risk and loan handling
• Probability of default
• Risk assessment and analysis
• Qualitative Factors in loans assessment
• Quantitative Factors in loans assessment
• Risk rating
• Loan interest rates

Module 2: Securities for lending

• Realizing security
• Real estate properties
• The importance of security
• Limited company security
• Valuation of security
• Guarantees
• Different types of charge
• Personal security
• What makes good security?
• Legal case study

Module 3: Analysing the Cash Flow

• Introduction to cash analysis
• Historical movements and the effects on cash
• Overtrading
• Amortization
• Working capital
• Cash flow available for debt servicing
• The use of earnings before interest
• Cash flow projections
• Tax
• Cash flow value depreciation

Module 4: The Lending Products

• Introduction to lending products
• Asset-based lenders
• Where else can businesses draw funding from
• Lending products
• International trade finance
• What happens when banks say no?
• Case study questions

Module 5: Issues Facing Businesses

• Introduction to financial difficulties
• How do businesses get themselves into financial difficulties?
• Dealing with insolvency
• The banker is a shadow director
• What are the options and choices facing the lending banker, and how does it protect itself?
• Insolvency process
• What are the routes a business might take to remedy challenges?
• Case study

Module 6: Business Strategic Analysis

• Introduction to business analysis
• What is a strategy?
• The different sectors of business that exist
• Tools and methods used to make a strategy
• Business stakeholders

Module 7: Maintaining The Relationship

• Small and medium-sized enterprises definitions
• The banker and customer relationship
• Mid-sized enterprises
• Learning different techniques to maintain a good relationship
• The legal categorization of business customers
• Assessing business management
• Entrepreneurs
• What is management?
• Business management
• Business sectors and operating cycles

Module 8: Financial Statement Analysis

• Balance sheet analysis
• The UCA model
• Ratio analysis
• Pro forma statement
• How business financial statements are constructed
• Income statement analysis
• Personal tax returns and cash flow
• Types of personal financial statements
• Key ratio and adjusted net worth
• Loan policies, procedures, and credit risk ratings
• The commercial lending process and the initial business development process
• Assessing non-financial risks

Module 9: Loan Structuring and Documentation

• Problem loans
• Ideniable secondary and tertiary sources of repayment
• Loan pricing and negotiations
• Commercial loan structuring
• Key documents, covenants and loan agreements
• Treasury management
• Business legal structures and life cycles