The loan portfolio analysis includes a thorough surveying of the financing agreements of the company. We analyze the financial instruments in place and their terms, maturities, prices, and other conditions. We go through collateral and contractual covenants.
Loan portfolio analysis refers to looking at existing financing agreements, but in addition to that, we also analyse financial bids/draft contracts for new or renewable financing.
In the analysis of debt sustainability, we calculate the customer’s future loan servicing ability, based on forecasts drawn either by the company itself or by our experts. The analysis serves as a tool when negotiating with the financiers.
Analysis of loan portfolio and debt sustainability can also be done as part of a business plan, with business plan forecasts serving as the basis for simulating cash flow. The forecasts will show the need for additional funding for the company.
The analysis of financial bids or draft contracts undergoes the same elements as in the analysis of existing contracts. In addition, if the contract includes financial covenants, it is good to mirror their levels to the company’s forecasts and simulate potential out-comings. This is aimed at ensuring sufficient leeway to prevent the covenant levels from being unnecessarily stringent and to try to simplify the agreement by reducing possible duplicative covenants.