Financial institutions must recognize the fundamental differences between lending to nonprofit and for-profit businesses – or risk suffering loan losses. Nonprofits’ goals differ greatly from other business entities because they don’t seek to maximize owner/shareholder wealth/value. Net income is usually minimal, which may or may not indicate poor cash flow. In addition, collateral is generally not a repayment option – without a potential public relations disaster.
In the face of declining government support, cash-strapped nonprofits are turning to local financial institutions for commercial loans and lines of credit. Do you know how to adequately evaluate a nonprofit entity’s loan request? This presentation will address the skills required to understand and underwrite the associated risks of lending to nonprofits and churches. Suggested performance ratios and underwriting benchmarks will be provided.
- Nonprofit accounting
- FASB 117 Financial Statements of Not-for-Profit Organizations
- New FASB nonprofit accounting guidelines
- When is an audit required?
- Tax Return Form 990 Part VI & Form 990-N
- Nonprofits that are exempt from filing
- Lending to nonprofits
- Application and loan officer inquiries
- Credit analyst’s financial assessment, including cash flow, liquidity, debt management, leverage, and key performance ratios
- Other considerations, including concentrations and budget for the next operating year
- Assessment of board and key executives
- Lending to churches
- Major factors to examine when underwriting church loans
- Prequalifying for a loan – suggested underwriting guidelines
- Illustration – building project benchmarks
- Employee training log
- Quiz you can administer to measure staff learning and a separate answer key
WHO SHOULD ATTEND?
This webinar will benefit commercial loan officers, credit analysts, senior credit officers, loan review officers, and branch managers.
PLEASE NOTE: The live webinar option allows you to have one telephone connection for the audio portion and one Internet connection (from a single computer terminal) to view online visuals as the presentation is delivered. You may have as many people as you like listen from your office speaker phone.
ABOUT THE PRESENTER – S. Wayne Linder, Young & Associates, Inc.
A thirty-year banking veteran, Wayne Linder was formerly the CEO of a community bank. As a Senior Consultant with Young & Associates, Wayne works as a lending and management consultant. He assists financial institutions under regulatory enforcement agreements, develops and implements written lending policies, and develops educational material for in-house lending training. Wayne is a popular seminar speaker with both national and international experience.
Originally recorded on November 6, 2018.
Recorded webinar is available until May 31, 2019.
Free Digital Copy included with purchase to download and view beyond link expiration date.
Price includes sales tax.