The Credit Renewal Process

The Credit Renewal Process - FINPACK‘Tis the season for credit renewals.  FINPACK has several tools to assist lenders with this process, from spreading, to financial analysis, projection preparation, and pulling the pieces of the credit analysis together.

In general, within FINPACK, the recommendation is to work down the left side file navigation to complete the credit renewal and analysis process.  Start with data sources, move to financial analysis, complete cash flow projections, and then pull everything together with the credit analysis tools.  With that being said, here is a bit more background on these tools and how they aid the credit renewal process. [Read more…]

FINPACK C & I Business Analysis

How to use FINPACK Loan CalculatorAnalyzing a commercial business can be tricky. Commercial businesses can be very different from each other even if they sell the same product. In addition, if you are unfamiliar with the particular industry, how do you measure management’s performance? The latest release of FINPACK has an overhauled C & I Analysis that helps you better analyze your commercial credits, as well as management’s ability.

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Cash Flow Planning Tools

Cash Flow Planning ToolsPutting together cash flow projections for farm clients can be tedious at times.  What is a reasonable feed expense for dairy operations?  Is the projected cost of production on corn acres in line with peers?  These are a few of the questions lenders and other professionals may ask when putting together projections, especially for new customers.  With that in mind, The Center for Farm Financial Management has put together two different cash flow planning tools.  The Minnesota Price and Cost Summary and the FINPACK Livestock Budget Estimates are two aides FINPACK users may find useful in cash flow planning.  These items and more are found in the FINPACK Knowledge Base.

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Mid-Year Monitoring

Cash Flow Monitoring WorksheetSomehow, we are already halfway through the year.  Periodic monitoring of projections that worked earlier this year may prevent surprises or problems later.  Now is a great time to use the cash flow monitoring worksheet to review how the monthly cash flow projection you completed compares to what has actually happened.  This tool is available for both of the monthly projection versions, with or without budgets.  Generating the cash flow monitoring worksheet is done in the cash flow plan that you wish to monitor.  Using this feature allows for timely monitoring of customer progress during the year.  And, if needed, adjustments to the cash flow plan can be made based on the actual data received.   [Read more…]

Using the UCA Cash Flow for Commercial Analysis

UCA Cash FlowAnalyzing a commercial credit can be challenging. Figuring out how a business is doing when you don’t have a good comparison or even figuring out if the core of the business is providing for the other pieces can make it difficult for you to understand how to analyze the business or structure the loan. Fortunately, FINPACK includes a report in the C & I Business Analysis tool that can be used to help you identify where the cash is being used in the business.

The Uniform Credit Analysis, or UCA Cash Flow, is designed to help you identify where the business’s cash is going and how it is being used. Is it being used to purchase additional inventory or is it being used to purchase equipment? [Read more…]

Which Commercial Analysis Tool is Right?

Which Commercial Analysis Tool is Right?When analyzing a commercial customer in FINPACK there are several tools available.  Deciding which tool best fits the analysis needed is important to get the optimal information, in order to reduce risk in the customer credit decision.  The type of business and customer information available will drive the commercial analysis tool used. [Read more…]

Spreadsheets vs. Software

Spreadsheets vs Software in Credit AnalysisAre you still using spreadsheets to complete the annual credit analysis on your customers?  Do your spreadsheets provide you the best information on a customer’s financial position?  Have your spreadsheets left you with questions related to your bank’s true risk?  If so, FINPACK Credit Analysis Solutions software is the tool you’ve been looking for! [Read more…]

How to Use the FINPACK Loan Calculator

How to use FINPACK Loan CalculatorThe FINPACK Loan Calculator is a useful tool as you enter or edit loan payment information into a Balance Sheet, Cash Flow Projection, Long Range Plan, or Financial Analysis in FINPACK.  The loan payment details from the Loan Calculator can be pasted into data entry, or it can also be used as a freestanding tool to brainstorm possible loan payment options.  When using the calculator in freestanding mode, the information cannot be pasted into FINPACK.  Here the only option is to View Payment Schedule and print or export the schedule.

There are two types of repayment options in the FINPACK Loan Calculator – amortized payments or fixed-principal payments.  The type of loan being modeled will dictate the specific calculator chosen.  [Read more…]

Top 5 Cash Discrepancy Culprits

Top 5 Reasons for Cash DiscrepanciesThere are always tricky situations that leave you scratching your head on how to get a customer’s year-end analysis balanced when it comes to cash in and cash out.  Whether you are using the Schedule F Cash to Accrual Analysis or the Financial Analysis (FINAN) there are some common culprits to track down cash discrepancies in these tools.
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Why Do Accrual Adjustments Matter?

Why Accrual credit analysis, FINPACK AgricultureCash is king! Every business needs cash to meet its financial obligations. But how much cash a farm generates is not a very good indicator of how the business is performing.  One of the main reasons is cash basis taxation. The right to file taxes based on cash rather than accrual income gives farms tremendous flexibility to manage taxable income. The result is that very high performing farms and farms that are struggling financially often have similar bottom lines on their Schedule F’s. [Read more…]