How to Prepare a Monthly Cash Flow Projection for Seasonal Borrowing Repayment Ability

How to Prepare a Monthly Cash Flow Projection for Seasonal Borrowing Repayment Ability



Devon Risk Advisory Group

  When : Tuesday, September 14, 2021

  Time : 12 : 00 PM EST

  Duration : 60 Minutes

  Product ID : DEVS-0026

  Level : Intermediate

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A frequent speaker, instructor, advisor, and writer on credit risk and commercial banking topics and issues, Dev is the principal of Devon Risk Advisory Group and engages in consulting, speaking and training on a wide range of risk, credit, and lending topics. As former SVP and senior credit policy officer at SunTrust Bank, Atlanta, he was responsible for developing, implementing, and administering credit policies for SunTrust's wholesale lines of business--commercial, commercial real estate, corporate investment banking, capital markets, business banking, and private wealth management. He also spent three years as managing director and credit approver in SunTrust's Florida commercial lending and corporate investment banking areas, respectively. Prior to SunTrust, Dev was chief credit officer for Barnett Bank's Palm Beach market. Besides stints at other banks in Florida, Kansas City, and Ohio, Dev's experiences outside of banking include CFO of a Honolulu construction company, combat engineer officer in the U.S. Army, and college economics instructor in Hawaii, Missouri, and Florida. A graduate of Ohio State University and the ABA Stonier Graduate School of Banking, he earned his M.B.A. from the University of Hawaii.

Dev serves as an instructor in RMA's Florida Commercial Lending School, the Stonier Graduate School of Banking, the Southwestern Graduate School of Banking, the Pacific Coast Banking School, and the American Bankers Association's (ABA) Commercial Lending. His school, conference, and workshop audiences have included participants drawn from the ABA, RMA, OCC, Federal Reserve, FDIC, FFIEC, SBA, the Institute of Management Accountants (IMA) and the AICPA.

Dev has written about credit risk management, financial analysis, and related subjects for the ABA's Commercial Insights, the Risk Management Association's RMA Journal, and other business professional journals. He is the author of Analyzing Construction Contractors and its related RMA workshop. A past national chair of RMA and former Florida Chapter president, Dev serves as a member of the RMA Journal's advisory board, and an ex-officio board member of the Florida and Atlanta RMA chapters. He also serves on the advisory board of the Atlanta Chapter of the Professional Risk Managers' International Association (PRMIA), and he has consulted on credit risk issues with banks in Morocco, Egypt, and Angola through the US State Department's Financial Service Volunteer Corps (FSVC).

One of the most basic analytical and underwriting tools a banker must have is the ability to determine whether a borrower can repay its short-term borrowings based on the financial information available. First, the session will explain the interrelationships among revenue projections, the expenses needed to support seasonal sales growth as well as the working capital assets, fixed assets, and liabilities necessary to support revenue growth. Second, the session will offer tips on how to analyzing underlying assumptions such as profitability, productivity, efficiency, and earnings retention.

Join Dev Strischek in this critical lending webinar as he shows how to use a borrower’s historic financials to project monthly balance sheet, income statement, and cash flow over the borrower’s fiscal year and seasonal expansion and contraction.

Areas Covered

  • A critical role of revenues in projecting financial statements and cash flow
  • Projection of income statement, balance sheet and cash flow to calculate loan needed to support projection and ability of the borrower to repay in full
  • Evaluation of underlying assumptions including the feasibility of  seasonal revenue growth rate, profitability, productivity, efficiency, earning retention, and leverage
  • Calculation of loan amount needed to support financial projection and borrower’s repayment ability
  • Analysis of asset collateral base available to support repayment

Learning Objectives

  • Learn how seasonal revenue projection determines income statement and income statement determines balance sheet
  • Learn the critical role of working capital assets, capital expenditures, and retained earnings in supporting projection
  • Learn how to generate a 12-month cash flow projection with the balance sheet and income statement
  • Learn how to estimate the size of the line of credit needed to realize financial projections
  • Learn how to underwrite line of credit needed to fit lending organization’s policies
  • Learn how to support loans with appropriate collateral and guarantees

Course Level - Basic/Intermediate

Who Should Attend

Credit analysts, underwriters, commercial bankers, loan review officers, senior lenders, credit department managers, chief credit officers.

Why Should You Attend

Financial organizations extend credit to borrowers when the borrowers show the ability to repay the loans extended. Ideally, a request for a five-year loan should be supported by a 5-year cash flow projection, and a request for a seasonal line of credit should be supported by a 12-month cash flow projection to identify when the borrower is likely to borrow and when the borrower can repay the line of credit in full.

  • $149.00

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