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Business Lending Fundamentals

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Business Issue - Building new relationships with small business borrowers is a strategic priority for many financial institutions. The challenge is enabling your customer contact staff to develop greater “fluency” in conducting credit conversations with business owners and managers. While these staff members are generally not expected to perform in-depth analyses or underwrite credits, they need a solid understanding of business lending fundamentals.

Omega Performance’s Solution - Business Lending Fundamentals is a foundation-level program that addresses the needs of staff who are responsible for originating, but not underwriting, business credit. This program is designed to help your business contact staff develop a working knowledge of business lending issues including the forms of business organization, why businesses borrow, analysis of the business strategy and management, analysis of business financial statements, and common loan structures.

Business Lending Fundamentals will help your staff efficiently and confidently obtain the right information needed for underwriting. They will have the knowledge about business lending to establish credibility and build new business relationships. They will also have more productive communication with central underwriting resources and be able to communicate credit decisions to the customer constructively and professionally.

What Is Included

Business Lending Fundamentals includes the following modules, each of which covers an important set of skills for performing the job of originating business credit relationships:

Learning about the Business addresses how to conduct a preliminary assessment of the business and the loan opportunity, including forms of business organization and key information to gather during the initial contact. This module also discusses the use of automated credit scoring.

Understanding Business Borrowing Needs features fundamentals of business financial statements and how to use information contained in the income statement and balance sheet to evaluate the business’s asset conversion cycle and potential borrowing needs. Participants learn to probe into the real reasons behind a borrower’s loan request and to think beyond the stated purpose.

Assessing the Business and Management focuses on understanding how business growth stages affect risk and teaches a systematic approach to evaluating the business and management in key functional areas. These insights about the business and its borrowing needs are used as a backdrop for the review of financial statements.

Fundamentals of Financial Statement and Tax Return Analysis teaches how to calculate and interpret basic financial ratios and measures to evaluate the performance of a business. It also teaches how to recognize common differences between income and expense reported on tax returns compared with financial statements prepared for external users.

Understanding and Communicating Credit Solutions helps participants match appropriate loan structures to needs and to understand the basics of loan support including collateral and guarantees. This module also covers principles of loan pricing and how to convey adverse credit decisions and counteroffers.

Delivery Options

Omega Performance offers flexible delivery options for Business Lending Fundamentals. The five self-study modules can be delivered alone or combined with a workshop. The workshop is focused on applying the skills and knowledge to two case studies. It consists of four discrete half-day sessions that can be delivered consecutively over two full days or individually spread over several weeks.