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Credit Engineering for Bankers, 2nd Edition by Johnathan Mun, Morton Glantz

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Chapter 5 Asset-Based Lending

Chapter Outline

  • Market Segments 80
    • Short-Term Secured Borrowers 80
    • Long-Term Secured Borrowers 81
  • Basic Axioms of Asset-Based Lending 81
  • Security Interest 82
  • Loans Secured with Accounts Receivables 85
    • Formula-Based Loans 86
    • The Loan Agreement 86
    • Loan Formula Certificate 87
    • Exposure Percentage 87
    • The Loan Officer’s Responsibilities 87
  • The Audit: Scope and Details 87
    • Step 1: Financial Statements 88
    • Step 2: Receivables (Overview) 88
    • Step 3: Accounts Receivable Aging 89
    • Step 4: Credit and Collection Policies 89
    • Step 5: Analysis of Delinquencies 89
    • Step 6: Evaluation of Sales 89
    • Step 7: Product Analysis and Product Policies 90
    • Step 8: Inventory 91
    • Step 9: Fixed Assets 91
    • Step 10: Analysis of Accounts Payable ...

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