Registration & Continental Breakfast
Foundation Concepts in Lending
8:00 a.m. - 8:30 a.m.
Registration opens at 8:00 a.m. and a continental breakfast will be served.
Understanding the Borrower's Business
This module begins with an overview of the business of banking and the role of the lender. The module introduces risk appetite, risk tolerance, risk culture and the risks assumed in the loan portfolio. The module presents concepts which form the foundation for the Commercial Lending Curriculum including the 5 Cs of credit, the Loan Evaluation Equation and the Loan Evaluation Process. The borrower operates in an external environment which is largely uncontrollable. The module introduces the elements of the external environment and identifies key variables or things within the business that management can manage to mitigate the impact of the external environment.
Assessing the Risks Facing the Borrower
Each type of business and industry has a unique mix of assets, liabilities, margins, asset utilization and financial leverage. It is essential that the lender understand these critical differences among businesses. This module examines how the typical business operates focusing on the operating, fixed asset, profit, life and cash cycles. It identifies key variables which are going to be critical to the success of the business. The module demonstrates how financing needs arise, defines the sources of repayment and appropriate loan structures to meet financing needs.
This module explores the risks impacting any business including risks introduced by the economic environment, the borrower’s industry and the borrower’s market. The borrower’s success is largely a function of a well-defined value proposition, an effective business strategy grounded in a defensible source of competitive advantage and successful implementation of that strategy. The module begins with an overview of the risks introduced by the economic environment. The module reviews the role of business and competitive strategy and defines three basic types of competitive strategies—price, product differentiation, and product focus. The module identifies the various factors influencing a company’s choice of business strategy. Product, industry, market structure and position, stage in life cycle and barriers to entry must be considered when defining and monitoring business strategy. The module outlines quantitative measures for assessing the effective implementation of strategy.
Networking & Welcome Dinner
This module examines the management process. The emphasis is on evaluating the management team focusing on aspects of management including skills, integrity, and core competence. The module also discusses tools available to the lender to evaluate management and monitor management performance.