Transaction Risk Management
- Risk Assessments consist of an on-site review of a borrower’s overall credit risk. Rather than performing the time consuming tests and reconciliations typically associated with a collateral audit, these reviews focus on financial performance and trends, collateral trends, operations, management, policies and procedures, and any other material pre-funding deal points. Risk assessments are typically less costly and time consuming and are shorter and less cumbersome than full Collateral Audit Reports.
- LCG personnel will verify the existence and quality of a lender’s collateral. Verification services include telephone verification of accounts receivable, inventory floor checking, and site inspections of real estate, machinery and equipment, and other property.
- For many lenders, account executives and investment managers simply do not have the time or resources to review a borrower’s performance and track record. So, if a site visit is not practical or warranted, LCG can perform a thorough desktop review of the borrower’s performance and any changes in its collateral. This review can also include the spreading and analysis of financial statements, compliance with loan covenants, and trend analysis of key performance metrics.