Archive for the ‘Focus on Lenders’ Category

How Do Your Borrowers’ Inventory Practices Stack Up?

Although borrowers often pledge inventory as loan collateral, the amount shown on their balance sheets isn’t always accurate. In fact, inventory can be a source of mistakes because its accounting is complex and the volume of transactions that flow through the inventory ledger is high. If management is lax about inventory, problems can easily spiral out of control. Read More

Rethinking Debt… A shake-up in the credit markets

The corporate finance world is in a state of flux: Banks continue to retrench after a disastrous 2008, tightening credit standards and following borrowers more closely. Borrowers also are rethinking their capital structures and lending decisions. For now, conservatism is the name of the game.

Examining the supply side

Last year many financial institutions were hurt because they’d made poor lending decisions. The credit market was overheated, but now the pendulum has shifted and banks are re-evaluating risk and finding ways to prevent future losses. New policies include: Read More

Cover Your Assets with Key Person Insurance

If one of your borrowers suddenly lost a key person, how would it affect their productivity, profits and ability to service debt? For many small businesses, the death or long-term disability of an owner or key employee spells disaster. Some businesses eventually recover after finding and training a replacement, but others are so reliant on key people that they’re forced to close shop. Read More

Cautious Spending – Are your borrowers in the survival mode?

As businesses continue to face economic uncertainty, rising costs and tighter credit standards, many are revisiting their capital spending budgets and prioritizing purchases to weather the storm. Before approving a new loan or a credit-line increase, consider whether borrowers have considered these cost-saving alternatives. Read More

Workouts Shape Up Ailing Borrowers

Many market analysts expect the ongoing economic downturn to persist throughout 2009. In fact, Manufacturers Alliance/MAPI Quarterly Economic Forecast predicts a 1.3% decline in gross domestic product (GDP) in 2009. Pessimistic outlooks also prevail in the automotive and housing sectors for this year.

Without relief in sight, weak borrowers may succumb to default. Protect your portfolio by proactively identifying unfit borrowers and coaching them to get on the road to financial health. Read More

GAAP’S Last Stand IFRS is no rumor — welcome to the next phase of financial reporting

Nearly 100 countries — including all of Europe, Canada and Australia — have replaced their domicile-specific accounting rules in favor of International Financial Reporting Standards (IFRS). Soon it may be our turn to jump on the bandwagon.

In August 2008, the SEC published its roadmap for IFRS adoption. The SEC proposal would require many public companies to file IFRS statements no later than 2014, if certain interim milestones are met. And the plan may allow some companies to make the switch sooner. Read More

Computers: Nurturer and Nemesis of Fraud

Unearthing fraud can be like finding a needle in a haystack. Most companies record thousands of journal entries across dozens of ledgers and subledgers each reporting period. As businesses increasingly rely on computers, the opportunity for, and sophistication of, fraud schemes grow.

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