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Business Lending Fundamentals


About Instructor

The small business market offers the opportunity to invest in the communities you serve while building lasting, mutually beneficial relationships with the business owners and professionals who support them. This course helps organizations tap into this lucrative market by providing the skills needed to successfully evaluate potential relationships with small businesses and establish credibility with their owners.


Anyone who needs to understand businesses and their borrowing needs, including branch managers, assistant branch managers, small business relationship managers, and business bankers.


Upon completion, participants will be able to:

  • Conduct meaningful conversations with business owners about operations and borrowing needs
  • Assess the industry position, business growth stage, management, and business model
  • Evaluate business loan requests to determine whether they represent bankable opportunities
  • Understand the various components of a borrower’s financial statements and tax returns
  • Improve communication with business owners and managers, as well as with internal management
  1. Learning about the Business
    • Explores the environment in which commercial lenders compete
    • Addresses the components of a preliminary assessment
    • Examines the implications of each type of business organization
    • Identifies key information to gather for different types of lending situations
  2. Understanding Business Needs
    • Defines balance sheet and income statement accounts
    • Compares and contrasts cash and accrual accounting
    • Conveys the importance of the operating cycle as a foundation for planning and conducting borrower conversations and risk analysis
    • Demonstrates how timing differences in the operating cycle create financing needs
    • Examines the impact of sales growth on financing needs
  3. Assessing the Business and Management
    • Examines the different growth stages of businesses
    • Provides a process to determine the effectiveness of a borrower’s competitive strategy
    • Demonstrates the key issues to address when assessing a business
    • Reviews the characteristics of strong general management analysis, including breadth, depth, leadership, and reputation
    • Conveys the importance of product-market management
    • Explores business issues related to labor facilities, purchases, and regulatory issues
    • Examines the quality and timeliness of financial reporting and information systems that support the business
    • Links personal financial habits of company principals to the likelihood of business debt repayment
  4. Fundamentals of Financial Information
    • Provides a more in-depth view of the parts of the financial statements and introduces the cash flow statement
    • Explains the value of common size analysis of balance sheets and income statements
    • Examines at a high level the calculations of liquidity, leverage, and profitability
    • Provides a process to evaluate personal financial statements to determine the strength of a guarantee
    • Introduces sources and uses of cash to explain how cash flows through a business
    • Explores all parts of a business tax return
    • Explains the concept of credit scoring
  5. Understanding Needs and Communicating Credit Solutions 
    • Explains the importance of communicating the story behind the company’s loan request as part of the credit approval process
    • Explores the different types of credit facilities
    • Examines secondary sources of repayment including collateral, guarantees, and subordination
    • Reviews the components of pricing
    • Demonstrates how to communicate the credit solution including approvals, counter-offers, and declines


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1 review for Business Lending Fundamentals

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    5 out of 5


    Excellent start for financial sector

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