Distressed Loan Management
Online Training Seminar
Distressed Loan Management was created for community bank lenders. Lenders that
currently face an extremely challenging and uncertain business environment. This training prepares lenders to early identify a distressed business, properly evaluate the loan
and choose a suitable course of action for minimizing the cost & potential loss to the bank.
The training consists of approximately 3 hours of video training supported by 18 pages of PDF printed material. There will also be 2
online meetings of 2 hours each providing 4 additional hours of instructor led discussion of the material.
Fee: $ 250 per attendee
Course # 20061 Instructor Led Online Meetings
Meeting # 1 June 16th 2:00 pm - 4:00 pm Video Sections 1
Meeting # 2 June 18th 2:00 pm - 4:00 pm Video Sections 7 -
Course # 20062 Instructor Led Online Meetings
Meeting # 1 June 23rd 2:00 pm - 4:00 pm Video Sections 1
Meeting # 2 June 25th 2:00 pm - 4:00 pm Video Sections 7 -
All meeting times are at Central Time unless noted
Online training videos covering meeting discussion topics will be made available to participants for reviewing approximately 30
hours prior to a scheduled online meeting.
Participants are required to review topic videos prior to attending online meeting.
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Meeting # 1 Video Discussion Topics
Video Section # 1 Introduction (15 minutes/
1 PDF page)
The seminar will primarily focus on managing distressed business banking
loans. Typical loans generated by community bank lenders. ( Business owners that manufacture a product, sell a product or provide a service) We outline how the training covers the early
recognition of distress, understanding the problem, evaluation of the business and developing an appropriate strategy. Later sections of the training are devoted to evaluating CRE
(Investment) loans and negotiating standstill & restructure agreements for CRE loans in default. Lastly, we review the key issues associated with Chapter 7 & 11
Video Section # 2 The Distressed Business (21
What are the early signs that a business is under distress? Distressed businesses
over time have the potential to evolve into problem loans. In this section, we analyze the evolution of a distressed business as it moves thru 3 phases on the way to a business failure. We identify
specific signs that indicate how serious the distress. Early recognition combined with a proper evaluation that a business is under serious distress allows for the opportunity to consider 5 possible
strategies to manage the credit.
Video Section # 3 Understanding the Problem (9 minutes)
Too many times we focus on the results of the problem not the
problem. What has happen in the environment of the business that has generated these losses, declining cash flow, etc. In essence, what is the problem? After
understanding the problem, lenders then need to decide if the problem is fixable? If fixable, what would it take to "fix" the problem? The answers to these two questions is the first step in
selecting an appropriate strategy.
Video Section # 4 Work Out Strategies (22 minutes/ 2 PDF
We review five possible work out strategies that could be deployed in managing a distress
business. For each strategy, the training itemizes what requirements should be met before deploying the strategy. Advice is also provided as to potential problems and issues that could arise in
pursuing a given strategy. Advice and perhaps even warnings gained thru experience. The determination of a work out strategy should follow an in-depth evaluation of the
business. The next 5 sections of the training cover how to conduct the evaluation of a distressed business.
Video Section # 5 Management Evaluation (10 minutes)
Video Section # 6 Financial Condition Evaluation (26 minutes)
Management: Does management have the skills required to steer
the business thru these stormy waters? Can they provide reliable information on a timely basis? Key questions that must be answered in our evaluation of management. This section provides
practical guidance on how to properly gauge the strength of management.
Financial Condition: How should a lender assess the financial
condition of a distressed business ? How serious is the financial health of the business? How to gauge the health when financial statements are not available? This evaluation will be
considerably different than evaluating a healthy business. We review a process as to how to approach this evaluation and what information will have to be obtained to determine the present and
possible future health of the business.
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Meeting # 2 Video Discussion Topics
Video Section # 7 Projected Cash Flow (9 minutes /1 PDF page)
What will we need to consider when creating and/or
analyzing the projected cash flow of a distressed business? Their projected cash flow will have a significant bearing on our decision as to what strategy fits the situation. This section
reviews what should be addressed in a projected cash flow. The cash flow analysis will be decidedly different than analyzing the cash flow of a healthy business. Lastly, we review a
sample cash flow and follow the possible questions that a lender could ask of the borrower.
Video Section # 8 Collateral Evaluation (13 minutes / 1 PDF page)
Video Section # 9 Collateral Liquidation Analysis (22 minutes/ 4 PDF pages)
The ultimate liquidation value of collateral will have a significant impact on selecting
the appropriate strategy for managing a distress business loan. In Section 8, we lay out a framework of crucial steps that should be taken in evaluating collateral. Overlooking these
steps may prove to have a negative impact on the liquidation value.
In Section 9, we review important practical and legal considerations in liquidating both
tangible & intangible personal property. (Accounts receivable, equipment & inventory) We address specific requirements for formulating a liquidation plan and value. Lastly, participants
review a detailed sample liquidation valuation for equipment.
Video Section # 10 CRE Distressed Loan (20 minutes / 1 PDF page)
Video Section # 11 CRE Loans in Default (12 minutes / 2 PDF pages)
What is the shape of the property today? What is the probability that this loan could be in payment default in the not too distant
future? Beyond just updating an appraisal, we review the steps to properly evaluate the condition of a distressed CRE (Investment) property. (Investment properties such as office buildings,
retail strip centers, hotels, etc. ) We focus on what a lender should check and evaluate regarding a distressed property. Lastly, participants receive a list of what should be considered in
developing a realistic projected cash flow.
If a distressed CRE loan goes into default, it is not unusual for borrowers to attempt to seek time
to improve the property's condition/cash flow. With even a minor improvement ot the property's condition/cash flow, they may seek a long term restructure of the loan. Accordingly, Section
11 covers the key requirements for negotiating Stand Still and Restructure agreements. Practical guidance & advice for lenders who find themselves involved in considering and
structuring these agreements.
Video Section # 12 Bankruptcy (4 minutes / 6 PDF pages)
All lenders should have a fundamental understanding of commercial bankruptcies. In this section, participants review a 6 page hand out
covering Chapter 7 & 11 bankruptcies. The material covers bankruptcies from a lender's perspective. What are the issues that arrive that a lender must deal with in a bankruptcy? How to
prepare for a possible bankruptcy. We conclude with practical advice for preparing for a possible bankruptcy and dealing with the bankruptcy process.
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Instructor: Jim Shreve
Over the past sixteen years, hundreds of lenders and credit analysts have attended
lending seminars conducted by Jim Shreve. He has over 25 years in commercial lending and credit experience. He holds a Masters in Finance and a B.S. in Accounting. His work-shop styled
approach to training is well known thru out the United States for providing a rewarding experience for all attendees regardless of their prior experience in lending or credit analysis
Distressed Loan Management
Fee: $250 per attendee
June 18th Meeting # 2 2:00 pm - 4:00
June 25th Meeting # 2 2:00 pm - 4:00 pm