Looking at recessionary economics in 2023, we need to act NOW to address expected potential weakness in our commercial loan portfolios. This virtual workshop shows you ways to do this with illustrations from real-life credit risk management lessons learned from ‘in the trenches’ during previous recessions. You will also receive helpful templates and resources to use at your bank. This session will be fast-paced and packed full of practical tips and information…along with Q&A after each section.
Section 1 – Credit Memos
- Do Credit Memos tend to change or evolve in a Recession? Should they?
- What should we require and expect of lenders and analysts: to be sure they have asked the ‘right’ questions, vetted the responses to the extent possible, and factored the borrower’s answers into our recommendations?
- How does a recession change this process?
- How can our credit memos be improved?
Section 2 – Loan Portfolio Triage and Loan Gradin
- How do we identify and prioritize borrowers to rank the potential of Loss Given Default (LGD)?
- How can we reduce the vulnerability of our loan grading system (AKA risk ratings, asset quality scores) in a recession…does it still adequately measure risk, given falling collateral values and uncontrollable external factors that impact our loan repayment?
- How do we factor industry weakness, when the borrower’s historical financials are still supportive?
Section 3 – Using Government Loan Guarantees
- SBA program update review
- As the PPP Loan Program was short-term relief, how can we help our commercial borrowers long-term, WHILE protecting the bank’s capital?
- What are the ‘rules’ to refinance our own debt into a government-guaranteed facility?
- Actual examples of using SBA guaranties for existing borrowers.
- Overview of popular SBA programs…from a LENDER’S point-of-view.
Target Audience: Commercial lenders, credit analysts and small business lender