Professional Education Course
IEDC Credit Analysis
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PDF version| Course Title: IEDC Credit Analysis | |
| Program ID: EDEV 1016P | Subject: Economic Development |
Sections
There are no sections available for registration to this course at this time. If you want to request an offering of this course, please contact us.
Important Course Information
Course Description
As many communities have programs aimed at encouraging the growth of local small businesses, economic developers often need to learn how to assess the viability of these businesses. In this course, participants will learn how to work with business owners to assess a small business's financial strengths and weaknesses. Economic developers and public officials can then make informed decisions about providing public financing to small business development.
How You Will Benefit
- Understand business financing needs and available private financing options
- Read important financial reports, including financial statements, balance sheets and the profit and loss statement
- Perform a credit analysis by determining how well a company buys and sells to make a profit
- Determine if the company pays it's suppliers on time, collects its receivables and controls costs to make a profit
- Understand the basics of structuring for small businesses that often combine public and private sector financing programs
What Is Covered
- Business credit analysis
- Profit and loss statements
- Quality indicators
- Analyzing business credit worthiness
- Where a company sometimes hides cash
- Assets, liabilities and net worth accounts
- Making credit decisions
- Economic development financing programs
- Structuring loans
- Underwriting loans
Course Administrator
Instructors
Course Agenda
| DAY ONE | |
| 8:00 - 9:00 am | Registration |
| 9:00 am - 12:30 pm |
Economic Development Finance Concepts This session provides economic developers with insight into the obstacles small business owners face in finding affordable expansion financing. Participants are give an overview of business financing needs and available financing options. The role of public agencies in complementing bank financing is also explored. |
| 12:30 - 1:30 pm | Lunch on your own |
| 1:30 - 3:00 pm |
Introduction to Business Credit Analysis How does a bank determine whether a business is creditworthy? This session details the credit analysis procedures banks use in making loan decisions. Participants investigate two business financial statements: the balance sheet and the profit-and-loss statement. |
| 3:00 - 5:00 pm |
The Balance Sheet Where's the cash? Participants learn about the accounts on the balance sheet in order to analyze how a company used its cash. Assets, liabilities and net worth accounts will be defined and explained during this session. |
| 5:00 pm |
Homework Assignment The evening in-class "homework" session will consist of case studies of actual businesses. Participants will learn how to spread financial statements and perform credit analysis on operating businesses. This is the first step in determining whether the business is creditworthy and can repay an expansion loan. |
| DAY TWO | |
| 8:30 - 9:30 am |
The Profit & Loss Statement The profit and loss statement is used to determine how well a company buys and sells to make a profit. |
| 9:30 - 10:30 am |
Quality Indicators This session continues the hands-on approach to making credit decisions about small businesses. Participants learn about various financial tools, known as quality indicators, which are used to analyze a company's creditworthiness. |
| 10:30 am - 12:30 pm |
Case Studies Participants will utilize the credit analysis performed on Monday night to make decisions about an operating business. Students will learn how to determine if the company pays it suppliers on time, collects its receivables, and controls costs to make a profit. |
| 12:30 - 1:30 pm | Lunch on your own |
| 1:30 - 3:30 pm |
Economic Development Financing Programs U.S. Small Business Administration (SBA) loan programs are described. Participants learn how the programs can be used to finance businesses in their communities. The SBA 7(a) and SBA 504 programs are available in every community in the country and are the leading public economic development financing tools. Understanding their requirements will enable participants to increase the programs' use and availability in their communities. Participants use the program information learned to structure deals for small businesses that combine public and private-sector financing. |
| 3:30 - 5:00 pm |
Structuring the Loan The case studies completed earlier are continued this afternoon. Participants will structure financing for the company for the expansion project, using adjusted cash flow and public and private sources of funding. |
| 5:00 - 6:30 pm |
Homework Assignment The evening homework builds on the skills developed through Monday's and Tuesday's sessions. Participants will underwrite a loan for an operating business, by spreading historical financial statements, reviewing the quality indicators and structuring a loan that the company can afford using public and private financing sources. |
| DAY THREE | |
| 8:30 - 12:00 pm |
Developer Real Estate Financing This session covers the motivation and requirements of real estate developers. Communities can influence the development process by providing financial incentives. Understanding developer requirements for minimizing risk and maximizing return, as well as the lending requirements of commercial banks, will help participants make informed decisions when providing financial incentives on real estate development projects. |
| 12:00 - 1:00 pm | Lunch on your own |
| 1:00 - 4:00 pm |
Economic Development Financing Programs Financing programs that influence real estate development projects are reviewed, including the U.S. Department of Housing and Urban Development's Community Development Block Grant program and the Section 108 Loan Guarantee program. Other federal, state and local financing programs are also explored. This session concludes with a real estate development case study, in which participants determine the amount of public assistance needed for a project to move forward. |
| 4:00 - 4:30 pm | Wrap-up/Evaluation/Certificates |
| * Agenda subject to change | |
**PLEASE NOTE: In order to receive full IEDC certification credit for this course and a certificate indicating course completion, participants must stay until the final session on the last day. Please make travel plans accordingly.
Course Notes
Student Requirements
Students should bring a calculator to this course.
Course Fees
IEDC Members:
- $525 (by October 26, 2011)
- $625 (after October 26, 2011)
- $665 (on-site)
Non-IEDC Members:
- $625 (by October 26, 2011)
- $725 (after October 26, 2011)
- $765 (on-site)
