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Commercial
Lending Review – March-April
2007
The Importance of Cash Flow Analysis
for Small Businesses
By Stan Scott
Why accrual-based accounting is
just the beginning for small businesses.
Asset-based lenders must accurately
gauge a borrower’s
credit risk profile based upon
its inherent value chain, life cycle stage and external
environment, including economic and industry trends. Small
business lenders cannot analyze borrowers in a vacuum and
can gain the information they need online. To measure a
prospective borrower, lenders must understand the demand/supply
dynamics of the prospect’s industry as they affect
cost structure, volume, pricing, distribution channels
and capacity.
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Commercial Lending Review – January
2007
Meeting
The Challenge of Small Business Asset-Based Credit Underwriting
In a Topsy-Turvy World
The last five years has witnessed the roller-coaster
U.S. economy fall in and climb out of a recession, race to
a speedy recovery and then slow to a modest trot. The latest
half-decade
has ushered in a series of events - some of the man-made
variety others natural in origin, which have echoed profound
consequences across the globe leaving parts of the world
embroiled in turmoil. Most notably and tragically, 9/11,
followed by the ongoing Middle-East conflicts, the destructive
hurricane season of 2005 and the recent retirement of long-time
Federal Reserve Chief, Alan Greenspan to name a few. Today,
U.S. leading economic indicators signal a slowdown to moderate
growth with the announcement of 2Q’06 GDP growth rate
of 2.6% on the heels of a robust performance the last 2 1/2
years propelled by elevated consumer and business spending
sustained by relatively low unemployment, rising productivity,
strengthening factory output and capacity utilization and
expanding corporate earnings capped by a sizzling 5.6% spurt
in real GDP in 1Q’06 – the
fastest quarterly growth rate during the recovery period.
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