COURSE OUTLINE

1. INTRODUCTION

A. Rationale for an ABL Loan

B. Role of the Examiner

2. PLANNING THE EXAMINATION

A. Recurring

i. Read the Credit File

ii. Discussion with Account Executive

iii. Read Examination File.

iv. Interaction with Operations/Verifications Person

v. Logistics

B. Surveys

i. Read Proposal Letter

ii. Industry Research

iii. Logistics

3. EXAMINATION PROCESS (OVERVIEW)

A. Tour of the Facility

B. Review of the Accounting Records

C. Networking with your office

D. Exit Interview

4. EXAMINING COLLATERAL

A. Order of Review

B. Accounts Receivable

i. Record Keeping / Systems

ii. Aging Analysis

iii. How Receivables are Created

iv. Credit Extension & Collection Process

v. Spread & Turnover Analysis

vi. Concentration / Analysis of Customer Base

vii. Analysis of Delinquent Accounts

viii. Sales & Dilutive Elements

ix. Tests of Authenticity

x. Analysis of Ineligible A/R

xi. Reconciliations

C. Inventory

i. Pre-Audit considerations

ii. Tour of Premises

iii. Inventory System

iv. Classification of Inventory

v. Reporting

vi. Examination Procedures

vii. Financial Statement Presentation - LIFO vs. FIFO

viii. Tests of authenticity

ix. Calculation of Inventory Advance Rates

D. Fixed Assets

i. Lending Methodology

ii. Variables Affecting Asset Values

iii. Types of Appraisals

iv. How to Read An Appraisal

v. Field Examiners’ Role

5. THE CASH AUDIT

A. Cash receipts

B. Disbursements

C. Bank Reconciliations

6. ASSET OTHER THAN CASH AND COLLATERAL

7. LIABILITIES

A. Accounts Payable

B. Notes Payable

C. Loans Payable

D. Other Liabilities / Contingencies

E. Types of Taxes

8. OFF BALANCE SHEET ITEMS

9. AVAILABILITY FORECASTING

10. FINANCIAL STATEMENT REVIEW

11. CASE STUDIES