Elements of Credit Analysis: A Manual for Loan Officers of Programs Serving Small and Microenterprises

Aims to orient the loan officer in order to perform tasks objectively, systematically, and professionally.

Is composed of six units and comprehensively covers all elements to be considered in granting credit:

• Describes in detail the basic elements needed to conduct an adequate credit analysis, outlining general and specific information required on the client and business;
• Examines the different modes of financing offered by credit programs, and models the application for working capital and fixed assets credit;
• Describes what an investment plan is and what characteristics it should have in order to be useful to the loan officer;
• Enumerates the principal criteria that the loan officer should consider to determine not only approval of credit but also the terms under which it will be granted. Places special emphasis on the importance of financial projections as a basis for defining credit terms;
• Outlines functions and objectives of the credit committee and lists the steps that the loan officer should follow in placing an application before the committee;
• Provides a series of cases concerning the various circumstances that can arise in processing a loan. Uses descriptions of fictional clients and their businesses to illustrate a range of decision making options that the loan officer will face daily.

[Adapted from author]