ABL and Factoring Basics

Overview

The ABL & Factoring Basics Workshop is a two-day program designed to give a soup to nuts overview of the ABL & factoring industries. The workshop will explore the sales process including understanding the borrower's business needs, determining the advance, financial analysis and due diligence, and working with the prospect through this process.

The program also includes an introduction to ABL and factoring operations, including monitoring, verifications and field audits, and a section on how to manage a borrower when things go wrong.

The ABL & Factoring Basics Workshop provides a systematic foundation for those who have pieced together their learning on-the-job, and those just starting out. It has been prepared by experts in both ABL and factoring and has proven valuable to hundreds of attendees over several years.

For upcoming workshop dates, click here.

Pricing

$645.00 for Members
$995.00 for Non-Members

What you will learn

1. Cash flow cycle for typical borrower

2. Basic credit skills

3. Evaluating the borrower's financial statements

4. Due diligence
a) Preliminary evaluation of a potential borrower
b) Due diligence review prior to issuing a proposal or commitment
c) Overview of due diligence review prior to closing

5. Salesmanship
a) How to work with a referral source
b) How to work with the prospect itself
c) How to say "no" without burning bridges

6. Operations
a) Monitoring the collateral and the borrowing base
b) Verification of receivables
c) Cash management
d) Field audits

7. Enforcement – introduction to the basic concepts
a) Default
b) Forbearance
c) Workout
d) Foreclosure and liquidation
e) Bankruptcy

Who should attend

Program Level: Basic

Entry-level business development officers with 6 months of experience in the entrepreneurial and small lender segment of the asset-based lending and factoring industry; staff from larger organizations are welcome to attend as well.

There is no advance preparation required for this group-live offering.

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Curriculum

Module 1 - Introduction

The purpose of this workshop is to teach entry-level business development officers in the entrepreneurial and small lender segment of the asset-based lending and factoring industry fundamental skills needed for professional success. This workshop has been designed to:

  • Provide essential knowledge of financing alternatives being offered by lenders in the entrepreneurial and small lender segment of the industry
  • Reinforce basic credit skills, including how to evaluate collateral, cash flow, and availability burn rate
  • Provide knowledge about and a system for approaching due diligence investigation of a prospect
  • Develop skills for working with referral sources and prospective borrowers to maximize the opportunities available for lending
  • Provide basic knowledge and overview about operations

Module 2 - Understanding Asset-Based Lending and Factoring

The purpose of this module is to introduce the financing approach provided by factors and asset-based lenders. At the end of this module, participants will:

  • Understand use of Article 9 provisions for granting security interests in accounts receivable and inventory for factoring and asset-based transactions
  • Have a better understanding of the type of financing a factor provides
  • Know what types of companies use factoring services and why
  • Have a better understanding of the type of financing an asset based lender provides
  • Know what types of companies use asset based lending services and why

Module 3 - Basic Credit Skills

The purpose of this module is to familiarize the new business development officer with basic credit skills related to categorizing prospective customers for an asset- based or factoring loan facility. At the end of this module, participants will:

  • Understand and be able to apply basic evaluation methods for the categories of collateral that make up the collateral pool for an asset-based or factoring facility
  • Be able to determine with relative confidence the quality of collateral offered for a loan transaction
  • Understand the basics of accounts receivable agings and be able to evaluate
  • Understand the concepts of advance rates, ineligible collateral, and dilution
  • Understand and be able to apply basic analysis and evaluation methods to prospects' financial statements
  • Understand basic cash flow concepts as they relate to the quality of a prospect and impact on availability
  • Be able to apply a practical approach when evaluating a prospective customer

Module 4 - Due Diligence

The purpose of this module is to look at the initial due diligence that should be done from the time a lead is received to the time that a proposal is issued, and from the time that a proposal has been executed through closing of the transaction. At the end of this module, participants will:

  • Know what questions to ask when making an initial evaluation of a prospective borrower, client, or transaction
  • Know what written information should be obtained from the borrower or client before a proposal letter can be written or issued
  • Know how to evaluate the information received
  • Know what additional due diligence must be done between the date that the proposal is executed and the closing of the loan or factoring transaction

Module 5 - Salesmanship

The purpose of this module is to provide an overview of the process of selling your company's financial products to prospective customers. At the end of this module, participants will:

  • Understand the sales process
  • Know how to identify, target and qualify referral sources, and how to develop those sources
  • Be better prepared to evaluate and to interact effectively with prospects
  • Be better able to evaluate the results of their sales efforts

Module 6 - Operations

The purpose of this module is to provide an overview of the day-to-day operations of a typical asset-based lender and of a typical factor. At the end of this module, participants will:

  • Have a better understanding of the way an asset-based lender receives, reports on, and monitors accounts receivable and inventory collateral
  • Have a better understanding of the way a factor purchases and monitors accounts receivable
  • Understand the mechanics of funding for an asset-based borrower and for a factoring client
  • Understand how an asset-based borrower collects accounts and how the lender controls the cash generated by collections
  • Understand how a factor collects the accounts receivable it buys from the client