CUNA Business Lending Certification Institute: Credit Analysis
Topics & Objectives

Please note that the Topics/Objectives listed below are subject to change.

Review of the Business Credit Analysis Process

• Review of the five C’s of credit
• Discuss balance sheets, profit and loss statements, and cash flow statements
• Explore operating cycles for manufacturing, retail, and service businesses

Analyzing Business Tax Returns

• Explore how to use tax returns as the basis for analyzing creditworthiness
• Identify the differences between tax returns for various types of businesses
• Learn what to focus on and what you can ignore in tax returns
• Realize the hazards of using interim financial information and the need to reconcile that information with end-of-the-year tax returns

Repaying Loans

• Explore the advantages and disadvantages of repaying loans with cash flow, personal guarantees, and collateral
• Discuss personal financial statements as an indicator of the personal financial strength of business owners and other guarantors

Life Cycles of Businesses

• Learn about the different stages of businesses from startup to maturity
• Understand the changing financing requirements at each stage

The Cashflow Statement

• Explore the information contained in cashflow statements and use it to identify how a business is generating and using cash
• Differentiate the definitions of cashflow

Financial Projections

• Understand financial projections as a tool in the credit analysis process
• Discover how to test business assumptions
• Learn how to develop projections for balance sheets, profit and loss statements, and cash budgets

Financing Sources for Start-up Businesses

• Discuss how to modify common credit analysis techniques for start-up businesses
• Explore a variety of startup issues including: typical sources of capital, the role of angel investors and venture capital, and analyzing a business with no history
• Understand the need to rely on projected financial information, equity contribution, owner financial strength, commitment and experience

How to Finance Fast-Growth Businesses

• Understand the financing requirements of fast-growth businesses
• Explore permanent working capital, an index of sustainable growth, and other analysis tools
• Identify when to use short- and long-term loans

Debt Financing from Non-Traditional Sources

• Discover how private and public non-profit loan programs can assist conventional private sector lenders fill financing gaps
• Become familiar with the types of loan incentives available though organizations such as the Small Business Administration, U.S. Department of Agriculture, and regional development organizations

Types of Financing & Loan Covenants

• Learn how to structure deals with non-traditional debt
• Explore the different financing instruments and their applicability
• Understand how to use loan covenants to protect the credit union
• Discuss loan types, lines of credit, term loans, and asset based lending

Case Study

• Analyze real loan applications
• Determine structure and terms
• Investigate red flags and issues