Tuesday
Sep 22
2020

Avoiding Costly Mistakes in Calculating Debt Service Coverage

Registration Options & Pricing

Please select your membership status.


Recorded Webinar Includes

  • Recording of the Live Webinar
  • Can be viewed anytime 24/7, beginning 2 business days after the webinar
  • Handout and Take-Away Toolkit
  • Available on Desktop, Mobile & Tablet
  • Free Digital Download, yours to keep
  • Share link with anyone at your credit union
  • Presenter’s contact info for follow-up
150+
Webinars
Available
100%
Satisfaction
Guaranteed

9:00 am – 10:30 am HST
12:00 pm – 1:30 pm PT
1:00 pm – 2:30 pm MT
2:00 pm – 3:30 pm CT
3:00 pm – 4:30 pm ET

Inadvertent errors in calculating debt service coverage can be costly. It is critical to accurately determine a borrower’s ability to repay, especially with today’s unstable economy. Discover how to avoid mistakes while learning more about making accurate determinations and prudent decisions.

AFTER THIS WEBINAR YOU’LL BE ABLE TO:

  • Identify potential vulnerabilities which could lead to inaccurate assessment of borrower repayment ability (debt service coverage)
  • Discuss common errors in the calculation of global debt service coverage which could lead to overstated secondary repayment ability
  • Distinguish between different repayment ability calculations and when each is most appropriate, including traditional EBITDA coverage, free cash flow, and uniform credit analysis
  • Recommend the level of financial statement assurances which will lead to the most confident lending decision, given loan amount, transaction, and borrower complexity
  • Understand common weaknesses in the institution’s development of repayment ability as found through third-party, independent loan reviews

WEBINAR DETAILS

The traditional five Cs of credit serve as the foundation for the assessment of credit risk inherent in loan origination and ongoing monitoring of the institution’s loan portfolio. Of the five Cs, capacity is often the most important factor in credit risk assessment. The emphasis in underwriting member business loans shifts from the individual to the financial soundness of both the business and the member requesting the loan (Loan Types – Appendix 10A NCUA Examiner’s Guide). Therefore, to ascertain “financial soundness,” the institution must determine repayment capacity of both the business and the member.

For this reason, accurately determining a borrower’s ability to repay is critical, especially in times of economic instability. This presentation will focus on the factors which could lead to inadvertent errors in the calculation of debt coverage, which could prove to be costly in the credit relationship if the institution incurs loss. Losses and potential erosion of capital are of greatest concern; however, institutions must consider the negative impact erroneous credit decisions (caused by underwriting errors) may have on the borrowing entity and its ownership. Prudent decisions based on accurate determinations protect the institution and the interests of borrowers and related entities.

Attendance certificate provided to self-report CE credits.

WHO SHOULD ATTEND?

This presentation will provide insight regarding common errors and mistakes in the determination of repayment capacity (debt service coverage). Personnel responsible for determining debt service coverage, interpreting debt service coverage, and approving credits based on the determination will benefit from this presentation.

TAKE-AWAY TOOLKIT

  • Employee training log
  • Interactive quiz

DON'T MISS THESE RELATED WEBINARS!

"Regulator Update for the Credit Analyst"
Wednesday, October 21, 2020

"Commercial Lending Series:
Analyzing Commercial Tax Returns: Forms 1065, 1120, 1120S & K-1s"

May 13, 2020
Available Now

 

NOTE:  All materials are subject to copyright. Transmission, retransmission, or republishing of any webinar to other institutions or those not employed by your financial institution is prohibited. Print materials may be copied for eligible participants only.

MEET THE PRESENTER

Young & Associates, Inc.
You might be interested in:

We provide credit union webinars on compliance, lending, regulations, security, operations, new accounts, collections, fraud, security & other topics. For more information on credit union education and online training opportunities, join our mailing list.