Omega Decision Strategy™ | Omega Performance

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Omega Decision Strategy™

The Omega Decision Strategy™ is the guiding process-based framework behind our credit training courses.

The Omega Decision Strategy™ ensures a high-quality loan portfolio by providing a consistent and reliable approach to credit decision making and risk management. The proven five-step loan process that ensures comprehensive assessment, analysis, packaging, and management of the various factors of a loan case. The process begins by evaluating the loan opportunity itself against the lending organization’s business model, carrying on to in-depth business and industry-specific risk analysis. Once there is a solid understanding of the borrower’s business environment, the analysis moves on to detailed reviews of financial statements, cash flow, and financial projections – allowing the lender to determine whether or not the borrower’s loan case is logical and laying the groundwork for a well-documented, fact-based loan recommendation followed by loan structuring and negotiation.

Regardless of the lender’s tenure, the step-by-step process laid out by the Omega Decision Strategy™ ensures that all factors of the loan case are reviewed diligently so as not to jeopardize the loan in ways that may be overlooked by focusing on a limited set of factors. Additionally, the Omega Decision Strategy™ reinforces your lending organization’s image of providing sound, responsible loans – a quality that is admired by customers and regulators alike.

Click through the five steps of the Omega Decision Strategy™ to learn more about the framework:

Opportunity Assessment

1. Opportunity Assessment
Does the prospect match the lending institution’s profiles? If the prospect is a current customer, can the relationship be expanded?

Identify opportunities
Review the prospect’s strategic objectives and financial structure. What immediate and long-term needs exist for credit or noncredit services?
2. Preliminary Analysis
Preliminary assessment
What is the specific opportunity? Is the opportunity legal and within your institution’s policy? Are the terms logically related? Do the risks appear to be acceptable?

Identify borrowing cause
What caused the need to borrow? How long will the borrowed funds be needed?
3. Repayment Source Analysis
Industry and business risk analysis
What trends and risks affect all companies in the borrower’s industry? What risks must the borrower manage successfully in order to repay the loan?

Financial statement analysis
What do the financial statements show about the borrower’s management of the business? What trends will influence the ability to repay?

Cash Flow analysis and projections
Will the business have sufficient cash to repay the loan in the proposed manner? Which risks will have the greatest impact on its ability to repay?
4. Loan Packaging
Summary and recommendation
What are the major strengths and weaknesses of the loan situation? Should a loan be granted?

Loan structuring and negotiation What are the appropriate facility, pricing, disbursement method, documentation and covenants?
5. Loan Management
Loan Monitoring
Is the borrower performing as expected? What caused variations? What are the risks to repayment? How can you protect the institution’s position?