This course focuses on the financial analysis of SMEs and covers those important areas of SME financial statement analysis very often when complete financial information is not always available or reliable.
When lending to large corporates the banker usually has the comfort of assessing the business activities and cash flow generation of large stable companies, with a stable client base. They can also rely on a professional management team running the business and adhering to principles of good corporate governance. In lending to Small and Medium enterprises, the credit officer faces a range of different risks and uncertainties that are often more difficult to assess. The course will focus heavily on the need to assess SME liquidity and cash flow management as well as areas of cash flow forecasting for SME companies that frequently do not have significant assets to provide bankers as security for SME loans.
Who should attend?
- This course is designed for bank relationship managers, corporate credit analysts and credit risk managers at financial institutions, who lend to Small and Medium-sized corporate clients or who are seeking to make the transition to SME lending. This highly interactive online live workshop provides a full, holistic review of financial, quantitative credit risk analysis for SMEs which are frequently, different to those assessing the credit risk of large corporates.
- It provides a range of applied techniques in assessing key financial areas of SMEs credit risk analysis and of financial statements that cannot always be relied upon to provide a true or fair view of the company. The course also places a heavy emphasis on cash flow forecasting for ‘asset light’ high potential SME companies that frequently cannot provide sufficient secondary sources of debt repayment as security for their SME loans.
Why Credit Analysis for Bankers Working with SMEs?
In meeting its overall objectives, the workshop will address the specific areas of holistic credit risk analysis for SMEs:
- Understanding the core financial areas that bankers need to analyse in assessing the credit risks of a SMEs corporate client;
- Identifying reasons why businesses typically face problems and mitigating potential risks through credit structuring;
- Using the company accounts and financial statements as a means for assessing the credit risk of an SME corporate client and what to do when those financial statements might not be fully reliable;
- Quantitative analysis of the corporate company through the use of company accounts and analysis;
- The Core ratios are used to assess the financial analysis of SMEs and their acceptable levels in terms of credit analysis.
- Management due diligence of financial and working capital management and therefore understanding how well the SME is managing its liquidity;
- Reviewing the importance of cash flow statement analysis and cash flow forecasting to assess the SMEs ability to honour their debts.
How the course is delivered
The mode of delivery is in-class, in-person at the course venue, with the option of participating virtually.