Secondary Repayment Sources: Cash Flow Projections

June 9 2020 16:00 - 17:00 UTC

Bankers rely on cash flow as the primary source of repayment, but collateral and guarantors offer the plan B solution to repayment when Plan A’s cash flow doesn’t work.

Why You Should Attend
We know we cannot liquidate collateral and call on the guarantors until the borrower has defaulted, and that default puts extra burden on the Plan B sources because their value is unlikely to be the same as they were at the inception of the loan. This session aims at providing practical guidance to evaluation collateral and guarantees as back-up repayment sources.

Areas to be discussed include:

  1. Identification of possible collateral assets
  2. Description of collateral valuation factors—liquidity, marketability, security options, and typical LTV’s
  3. Evaluation of guarantor financial statements to determine adjusted net worth, value of guarantor’s assets outside of the borrowing entity

What can be learned from this session?

  1. Not all assets are created equal at liquidation because they differ in degree of liquidity, marketability, and security, and we differentiate these inequalities by setting loan-to-value ratios and their potential losses given default
  2. Bankers want a borrowing entity’s principals to guarantee credit extended to the entity, but some guarantors have deeper pockets than others, and we sum up the size of their deep pockets by determining their relative adjust net worths
  3. Sizing up the secondary sources of repayment give lenders a viable Plan B if Plan’s A cash flow fails to perform

Who would benefit?

  • Credit Analysts
  • Credit Managers
  • Loan review officers
  • Work-out officers
  • Commercial lenders
  • Credit Risk Managers
  • Chief Credit Officers
  • Senior Lenders
  • Senior Lending Officer
  • Bank Director
  • Chief Executive Officer
  • President
  • Board Chairman

CPE Information:
• Prerequisites: N/A  • Advanced Preparations: N/A  
• Course Level: Basic • Group Internet Based Training

CBANC Network is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website:

  • Liquidity
  • Cash Management
    • Collateral
    • Cash
  • Secondary Repayment Sources 06092020.pdf
    Attendees Only

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