Course Overview

Global Cash Flow I: Foundations in GCF Concepts provides participants with a commercial lending risk assessment tool to: estimate the probability of loan repayment from a business and its owners as borrowers or guarantors, and make an informed credit decision by combining the information in the business and personal cash flow statements to determine whether the combined global cash flow is sufficient to service the debt of the business, its owners, and its guarantors.

     

Duration

7.5 hours

Delivery

Instructor-Led Online

Program Level

Foundational

 

Prerequisites

Assumes participants have completed the following RMA courses, or have the equivalent experience: Analyzing Personal Financial Statements and Tax Returns, Analyzing Business Tax Returns, and Cash Flow Analysis I.

 

 

Who Will Benefit?

Designed for practicing commercial loan officers and other lending and credit professionals who lend to borrowers including private clients, small businesses, and closely held corporations, and who need to increase their understanding of repayment risks associated with contingent liabilities of the owner and their business interests.

   

Learning Objectives

Upon completion of this course, participants will be able to:

• Estimate the probability of loan repayment from a business and its owner(s) as borrowers or guarantors.
• Make an informed credit decision by combining the information in the business and personal cash flow statements to determine whether the global cash flow is adequate to service the debt of the business, its owners, and its guarantors.
• Identify the issues or risks in small business/self-employed, private client, and closely-held business lending, and ways to analyze and assess these risks.
• Define global cash flow.
• Analyze the interdependence of entities.
• Distinguish income from cash flow (including balance sheet changes) and recurring from non-recurring cash inflows and outflows.
• Use global cash flow analysis to determine appropriate loan structure elements.

Methodology:

Through a mix of case studies, small group activities, and active discussions, participants are better prepared to apply the content learned when they return to their jobs. The case study for Global Cash Flow I involves a dental practice with $627,403 in gross revenues and $187,892 in assets. The dentist/owner draws $126,823 in salary, has personal assets of $3.3 million and a net worth of $1.72 million. The dentist owns commercial real estate, including the office building where his dental practice is located, as well as apartments. The case scenario involves a loan request of $146,000 to refinance existing debt of the dental practice and fund the purchase of new equipment.