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Economic Development Training Class
Economic Development Credit Analysis
In partnership with the National Development Council (NDC)
Date: June 4-6, 2008
Location: Charlotte, NC
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“I now know what to look for when I have someone asking for a
loan.” | As many communities have programs aimed
at encouraging the growth of local small businesses, economic developers often
need to learn how to assess the viability of these businesses. In this course,
participants will learn how to work with business owners to assess a small
business’s financial strengths and weaknesses. Economic developers and public
officials can then make informed decisions about providing public financing to
small business development.
In the course, participants are given an overview of business financing needs
and available private financing options, as well as how the public sector can
complement bank financing. This course is very hands-on, with participants
learning how to read important financial reports, including financial
statements, balance sheets and the profit and loss statement. Using this
information, participants will be able to perform a credit analysis by
determining how well a company buys and sells to make a profit. Participants
will also learn how to determine if the company pays it suppliers on time,
collects its receivables, and controls costs to make a profit. Most importantly,
participants will learn the basics of structuring deals for small businesses
that often combine public and private sector financing programs.
Course Highlights:
• Business credit analysis
• Profit and loss statements
• Quality indicators
• Analyzing business credit worthiness
• Where a company sometimes hides cash
• Assets, liabilities and net worth accounts
• Making credit decisions
• Economic development financing programs
• Structuring loans
• Underwriting loans
Students should bring a calculator to this course.
Agenda
June 4 |
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8:30 - 9:00 am |
Registration |
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9:00 am - 12:30 pm |
Economic Development Finance Concepts
This session provides
economic developers with insight into the obstacles small business owners face
in finding affordable expansion financing. Participants are give an overview of
business financing needs and available financing options. The role of public
agencies in complementing bank financing is also explored. |
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12:30 - 1:30 pm |
Lunch on your own |
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1:30 - 3:00 pm |
Introduction to Business Credit Analysis
How does a bank determine
whether a business is creditworthy? This session details the credit analysis
procedures banks use in making loan decisions. Participants investigate two
business financial statements: the balance sheet and the profit-and-loss
statement. |
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3:00 - 5:00 pm |
The Balance Sheet
Where's the cash? Participants learn about the
accounts on the balance sheet in order to analyze how a company used its cash.
Assets, liabilities and net worth accounts will be defined and explained during
this session. |
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5:00 pm |
Homework Assignment
The evening in-class “homework” session will
consist of case studies of actual businesses. Participants will learn how to
spread financial statements and perform credit analysis on operating businesses.
This is the first step in determining whether the business is creditworthy and
can repay an expansion loan. |
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June 5 |
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8:30 - 9:30 am |
The Profit & Loss Statement
The profit and loss statement is
used to determine how well a company buys and sells to make a profit.
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9:30 - 10:30 am |
Quality Indicators
This session continues the hands-on approach to
making credit decisions about small businesses. Participants learn about various
financial tools, known as quality indicators, which are used to analyze a
company’s creditworthiness. |
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10:30 am - 12:30 pm |
Case Studies
Participants will utilize the credit analysis
performed on Monday night to make decisions about an operating business.
Students will learn how to determine if the company pays it suppliers on time,
collects its receivables, and controls costs to make a profit. |
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12:30 - 1:30 pm |
Lunch on your own |
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1:30 - 3:30 pm |
Economic Development Financing Programs
U.S. Small Business
Administration (SBA) loan programs are described. Participants learn how the
programs can be used to finance businesses in their communities. The SBA 7(a)
and SBA 504 programs are available in every community in the country and are the
leading public economic development financing tools. Understanding their
requirements will enable participants to increase the programs’ use and
availability in their communities. Participants use the program information
learned to structure deals for small businesses that combine public and
private-sector financing. |
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3:30 - 5:00 pm |
Structuring the Loan
The case studies completed earlier are
continued this afternoon. Participants will structure financing for the company
for the expansion project, using adjusted cash flow and public and private
sources of funding. |
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5:00 - 6:30 pm |
Homework Assignment
The evening homework builds on the skills
developed through Monday’s and Tuesday's sessions. Participants will underwrite
a loan for an operating business, by spreading historical financial statements,
reviewing the quality indicators and structuring a loan that the company can
afford using public and private financing sources. |
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June 6 |
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8:30 - 12:00 pm |
Developer Real Estate Financing
This session covers the motivation
and requirements of real estate developers. Communities can influence the
development process by providing financial incentives. Understanding developer
requirements for minimizing risk and maximizing return, as well as the lending
requirements of commercial banks, will help participants make informed decisions
when providing financial incentives on real estate development
projects. |
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12:00 - 1:00 pm |
Lunch on your own |
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1:00 - 4:00 pm |
Economic Development Financing Programs
Financing programs that
influence real estate development projects are reviewed, including the U.S.
Department of Housing and Urban Development’s Community Development Block Grant
program and the Section 108 Loan Guarantee program. Other federal, state and
local financing programs are also explored. This session concludes with a real
estate development case study, in which participants determine the amount of
public assistance needed for a project to move forward. |
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4:00 - 4:30 pm |
Wrap-up/Evaluation/Certificates |
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* Agenda subject to change |
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**PLEASE NOTE: In order to receive full IEDC certification credit for this course and a certificate indicating course completion, participants must attend the entire course and stay through the final session on the last day. Please make travel plans accordingly.** |
Instructors
Pat Thomson
Director
National Development Council
Pat Thomson, has been a Director with the National Development Council, a community and economic development nonprofit based in New York City, since 1991. She is currently the CFO for NDC ‘s development and financing subsidiary, the Housing and Economic Development Corporation (HEDC). HEDC finances and develops Low Income Housing Tax Credit projects, New Markets Tax Credit projects, and community development real estate projects. Pat also is an instructor in finance classes for professionals on topics including Multi-Family Housing Development and Small Business Lending.
Prior to joining NDC, Pat worked for the NC Department of Commerce and was the Planner for Transylvania County and the City of Brevard. She received a B.A. degree from Duke University and a Masters Degree from the University of North Carolina.
Accommodations/Training Location
The Westin Charlotte
601 S College St
Charlotte, NC 28202
Phone:
(704) 375-2600
Website: www.starwoodhotels.com/westin
Hotel Rate: $155 single/double
Hotel cut-off date: May 14,
2008
Registration
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By April 23 |
Apr 24 - May 21 |
*After May 21 |
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IEDC Member |
$495 |
$595 |
$635 |
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Non-member |
$595 |
$695 |
$735 |
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*Walk-in registrations will be accepted. Full
payment must be made on-site in order to attend the course.
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Individual paying by credit card: Click this button if you are
registering as an individual IEDC member or nonmember and paying by credit
card. |
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Group or partner paying by credit card: Click this button if you are
paying by credit card and registering a group or as a partner with a promo
code. |
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Individual, group, or partner paying by check or purchase order: Click
this button to download a form (PDF) if you are paying by check or purchase
order, whether you are an IEDC member, nonmember, partner, or group. Form must
be faxed or mailed in and accompanied by payment. |
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