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    The Five Cs of Commercial Credit: The Basic Elements of Credit and Lending

    $99.00
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    The five Cs of commercial credit—character, capacity, capital, conditions and collateral—have comprised five basic elements of credit and lending. Most bankers know these basic principles, but this webinar offers a practical framework for their use in credit analysis and underwriting by showing how they are linked--how character emphasizes willingness to repay while the other four deal with ability to repay. Please join Dev Strischek as he explains how credit analysts can use the five Cs of credit to assess repayment ability and assist underwriters and lenders in the credit adjudication process. This class is aimed at both people new to financial organizations as well as an enjoyable refresher to more experienced bankers.

    Overview

    Lenders assess an applicant's credit risk based on a number of factors, including credit/payment history, income, and overall financial situation. The “5 Cs” of credit character, capacity, capital, conditions and collateral— help lenders guage the creditworthiness of an individual or business. 
     
    Although most bankers are familiar with these basic principles, many do not understand how the 5 Cs are connected. This webinar offers a practical framework for using the 5 Cs in credit analysis and underwriting by showing how they are linked. While character emphasizes willingness to repay, the other four Cs deal with ability to repay.
     
    Discover how to use the five Cs of credit to assess repayment ability, and learn how to assist underwriters and lenders in the credit adjudication process. 
     
    Covered Topics
     
    BREAKING DOWN 'Five Cs Of Credit'
    • Character. FICO Score and Evaluating Credit Reports to Understand the Borrower's Track Record for Debt Repayment. Other Tools to Determine Quality and Character of Applicant Include:
      • Personal and business credit reports
      • Resume of owners
      • Current standing on monies already borrowed with bank
      • Performance of deposit accounts/bank statements
      • Personal Financial Statement
      • A written business plan that includes financial projections, opportunities and risks, and who or what the competition is in their industry
    • Capacity (Cash Flow/Debt Service). Assessing the Borrower's Debt-to-Income Ratio and Compare Income Against Recurring Debts. Examine the Applicant's Job Stability. Request Documents from Borrower, Such as:
      • 3 years historical financials (Profit & Loss and Balance Sheet)/interim financials,
        and/or projections
      • 3 years business tax returns
      • Rent rolls for leased property
      • Personal Financial Statement of the guarantors
    • Capital. Review Applicant's Contribution(s) and Down Payments. Sources of Capital Include:
      • Owner’s capital (cash injected by borrower)
      • Retained earnings of the business
      • Capital raises by private investors
      • Grants and other government sponsored programs that allow for lower levels of capital by borrowers to be eligible for financing such as the SBA or USDA financing programs that support small businesses and agricultural businesses
    • Collateral (Secondary Source of Repayment). Can the Borrower Secure the Loan? Examples of how banks evaluate and value collateral:
      • Appraisals on property
      • Equipment listing and depreciation schedules
      • Statement on marketable security accounts
    • Conditions. Interest Rate and Amount of Principal. Examine the Borrower's Intention.
     
    Who Should Attend? 
    This class is aimed at both people new to financial organizations as well as an enjoyable refresher to more experienced bankers. This webinar will be especially beneficial for:
    • Credit Analysts
    • Underwriters
    • Consumer Lenders
    • Commercial Lenders
    • Mortgage Officers
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    Overview

    Lenders assess an applicant's credit risk based on a number of factors, including credit/payment history, income, and overall financial situation. The “5 Cs” of credit character, capacity, capital, conditions and collateral— help lenders guage the creditworthiness of an individual or business. 
     
    Although most bankers are familiar with these basic principles, many do not understand how the 5 Cs are connected. This webinar offers a practical framework for using the 5 Cs in credit analysis and underwriting by showing how they are linked. While character emphasizes willingness to repay, the other four Cs deal with ability to repay.
     
    Discover how to use the five Cs of credit to assess repayment ability, and learn how to assist underwriters and lenders in the credit adjudication process. 
     
    Covered Topics
     
    BREAKING DOWN 'Five Cs Of Credit'
    • Character. FICO Score and Evaluating Credit Reports to Understand the Borrower's Track Record for Debt Repayment. Other Tools to Determine Quality and Character of Applicant Include:
      • Personal and business credit reports
      • Resume of owners
      • Current standing on monies already borrowed with bank
      • Performance of deposit accounts/bank statements
      • Personal Financial Statement
      • A written business plan that includes financial projections, opportunities and risks, and who or what the competition is in their industry
    • Capacity (Cash Flow/Debt Service). Assessing the Borrower's Debt-to-Income Ratio and Compare Income Against Recurring Debts. Examine the Applicant's Job Stability. Request Documents from Borrower, Such as:
      • 3 years historical financials (Profit & Loss and Balance Sheet)/interim financials,
        and/or projections
      • 3 years business tax returns
      • Rent rolls for leased property
      • Personal Financial Statement of the guarantors
    • Capital. Review Applicant's Contribution(s) and Down Payments. Sources of Capital Include:
      • Owner’s capital (cash injected by borrower)
      • Retained earnings of the business
      • Capital raises by private investors
      • Grants and other government sponsored programs that allow for lower levels of capital by borrowers to be eligible for financing such as the SBA or USDA financing programs that support small businesses and agricultural businesses
    • Collateral (Secondary Source of Repayment). Can the Borrower Secure the Loan? Examples of how banks evaluate and value collateral:
      • Appraisals on property
      • Equipment listing and depreciation schedules
      • Statement on marketable security accounts
    • Conditions. Interest Rate and Amount of Principal. Examine the Borrower's Intention.
     
    Who Should Attend? 
    This class is aimed at both people new to financial organizations as well as an enjoyable refresher to more experienced bankers. This webinar will be especially beneficial for:
    • Credit Analysts
    • Underwriters
    • Consumer Lenders
    • Commercial Lenders
    • Mortgage Officers
    Presenter:

    Dev Strischek

    A frequent speaker, instructor, advisor and writer on credit risk and commercial banking topics and issues, Dev Strischek is principal of Devon Risk Advisory Group and engages in consulting, speaking and training on a wide range of risk, credit, and lending topics.  As former SVP and senior credit policy officer at SunTrust Bank, Atlanta, he was responsible for developing, implementing, and administering credit policies for SunTrust’s wholesale lines of business--commercial, commercial real estate, corporate investment banking, capital markets, business banking and private wealth management.   He also spent three years as managing director and credit approver in SunTrust’s Florida commercial lending and corporate investment banking areas, respectively.  Prior to SunTrust, Dev was chief credit officer for Barnett Bank’s Palm Beach market.  Besides stints at other banks in Florida, Kansas City, and Ohio, Dev’s experiences outside of banking include CFO of a Honolulu construction company, combat engineer officer in the U.S. Army, and college economics instructor in Hawaii, Missouri, and Florida.  A graduate of Ohio State University and the ABA Stonier Graduate School of Banking, he earned his M.B.A. from the University of Hawaii. 

    Dev serves as an instructor in RMA’s Florida Commercial Lending School, the Stonier Graduate School of Banking,  and as both an instructor and as a member of the American Bankers Association's (ABA) Commercial Lending and Graduate Banking School advisory board.  His school, conference, and workshop audiences have included participants drawn from the ABA, RMA, OCC, Federal Reserve, FDIC, FFIEC, SBA, the Institute of Management Accountants (IMA) and the AICPA.

    Dev has written about credit risk management, financial analysis and related subjects for the ABA’s Commercial Insights, the Risk Management Association’s RMA Journal, and other business professional journals. He is the author of Analyzing Construction Contractors and its related RMA workshop.  A past national chair of RMA and former Florida Chapter president, Dev serves as a member of the RMA Journal’s advisory board, and an ex-officio board member of the Florida and Atlanta RMA chapters.  He also serves on the advisory board of the Atlanta Chapter of the Professional Risk Managers’ International Association (PRMIA), and he has consulted on credit risk issues with banks in Morocco, Egypt, and Angola through the US State Department’s Financial Service Volunteer Corps (FSVC).