Training Course Syllabus:

Writing Effective Credit Memos and Loan Narratives Webinar

The purpose of this course is to teach skills required to write an effective credit memorandum, which places emphasis upon factors or trends that are important without the need to state the obvious. In short, the credit memo should present relevant, material facts and the writers’ thoughts and opinions. Remember, anything you write in a credit memorandum will become public record if you find yourself in court with a borrower.

After a detailed credit analysis of a loan request has been performed, it is now time to communicate your findings in writing. Credit memoranda are a primary means of communications within the banking industry. Without a proper understanding of how to effectively write a credit memorandum is the difference between conducting a successful lending process to the consumer.

Why Should you Attend:

In writing effective credit memoranda, it is not what you say that commands attention, but how you say it. Learn the three functions of credit memoranda: 1) They provide information on the condition and status of a customer relationship; 2) They provide a record of thoughts and actions and 3) They support or recommend action.

The webinar will also explore the underwriting and reporting on Commercial Real Estate, Construction Loans, Acquisition and Development Loans and Multi-Family Unit loans. In doing so, several samples of proven credit memos will be examined to insure bankers are covering the areas required by the banking regulators.

Essence of Credit

1. Purpose and basis of the credit


2. Primary and secondary source of repay


3. Written repayment program


4. Collateral valuations


5. Conformity to credit policy


6. The five C’s of credit


7. Strengths and weaknesses


8. Justification for exceptions to underwriting


9. Makes recommendation


10. Credit Memos


11. Primary means of communication within banking industry


12. Serves three functions:


13. Supports or recommends action


14. Provides information on the condition and status of a customer relationship


15. Provides a record of thoughts and actions relative to a customer relationship


16. Memos are to be succinct and to the point, but we violate this idea


17. Readers of credit memos are skilled bankers. Therefore, it is not necessary to state the obvious


18. Memos should present relevant material facts and writers thoughts and opinions


19. The written opinions should be supported by facts


20. Anything you write in a memo will become public record if you end up in court with a customer

Objectives of the Presentation:

At the end of this course, the participant will be able to:

• Strengthen their understanding of credit analysis


• Clearly describe the Financial Impact of changes in financial factors and not just report on what changed


• Interpret financial trends and financial ratios


• Write succinct and focused credit memoranda


• Meet with management armed with relevant questions and issues to be addressed


• Feel more confident in defending a recommended course of action based upon relevant facts and not instinct


• Identifying Strengths and Weakness in the writing process and evaluating the Lender. Margin Change Analysis and Liquidity along with debt to income ratios.
   

  Potential Gross Income

  Sources of Repayment

  Key Risk and Structuring Issues

   
• How to summarize the credit memorization process in these categories. Leverage, Liquidity, Cash Flow, Financial Ratios, Asset Management and operation/Performance Ratios.


• Organizing the Credit Report based upon Leverage, Liquidity, Cash Flow, Financial Ratios, Asset Management and Operation/Performance Ratios. Knowing these factors will accurately summarize the strengths and weaknesses of the entire lending process. This process will ensure that every facet of the writing the credit memo process has been covered.

Seminar Summary:

Learn to write an effective credit memorandum and loan narrative, which places emphasis upon factors or trends that are important. (see full course description)

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