Objective

The overall goal of this three day workshop is to build analytic skills. Using a structured and systematic approach, participants will learn to evaluate the credit standing of a SME*. The workshop will demonstrate how to combine a qualitative assessment of the company and its management with a quantitative analysis of its performance. Simple and effective forecasting tools are used to assess and anticipate the performance of the SME. A case study will form an integral part of the workshop, allowing participants to apply the concepts acquired during the workshop to a real-life scenario. Specifically participants will be equipped to:

• Assess the credit worthiness of SME borrowers using a 4-step approach
• Evaluate the commercial viability and sustainability of the business model and management’s ability to deliver to plan
• Use a simple cash flow forecasting model to anticipate a company’s future performance, sensitise and evaluate assumptions, and interpret their impact on the credit outlook and the ability to service its debt
• Understand the key funding sources available to SMEs
• Build robust monitoring and covenant packages to meet the commercial needs of the company and provide protection to the lender.

* Small and Medium Sized Enterprise (SME): Typically a company with sales or revenue up to £100 million or a balance sheet totalling up to £90 million, with fewer than 500 employees, which is not part of a larger enterprise.

Analytical Overview

Provide a structured approach for the analysis of a company’s creditworthiness. Participants will evaluate business needs and focus on key components of credit analysis.

• Purpose: identify the type of borrower and use of funds
• Payback: link primary and secondary sources of repayment
• Risks to repayment: current market conditions and their impact on risk assessment due to key macro, sector and/or company specific considerations
• Structure: assess the appropriateness of the debt structure to meet the commercial needs of a company while protecting lenders’ interests
• Exercise: identify risks in several sectors.