Short-Term Loan Structuring for Commercial Borrowers - Getting That Line of Credit Right

Date:

Oct 8, 2024

Structuring credit facilities for short-term loans and lines of credit is more challenging for financial institutions compared to structuring long-term loans. This course is designed to demonstrate the factors required to consider in establishing the proper loan amount for short-term needs, and not rely solely upon a formula-driven approach. This is the essence of short-term loan structuring.

Short-term loans and lines of credit require examination of several factors to reach the proper amount required. This is very important because underfunding or overfunding the amount a borrower requires to fund their operations can cause problems.

During this session, you will learn how to calculate the length of the financing gap, which is the time between receipt of cash from the operating cycle and the time required to pay creditors. Specifically, the course will demonstrate the key financial ratios to determine the financing gap, and how to utilize this data to determine the Asset Conversion Cycle and the Operating Cycle.