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How Asset based lenders can reduce risk lending
Comparison of the return of assets and the cost of borrowing if the yield was greater than the cost of borrowing, the risk assets becomes a little but if the big cost of borrowing and Mataathmlh of interest incurred on investments and asset returns are low, the risk is great and here clearly show the risk of borrowing
There are many factors to consider for Asset based lending for analysing the risk:
1.Company specific benchmarks, Industry specific bench marks, Country specific bench marks, Stability and consistency of government and its policy.
2. Evaluation of cash cycle - Inventory turn over, Receivable and Payables turn over- this is very important factor to check the liquidity position of the company. This will assist identifying the Bad and doubtful receivables and expired or slow moving inventories.
3. Valuation of the asset itself- the method, principles used in valuation and analysing various techniques.
4. And- also to consider the reputation and credibility of the company's management and its previous track record in relation to honouring the debts.
5. Due consideration should be given the amount and tenor of asset based lending and synchronising these with the consistency of the borrower.
Asset based lenders need to take steps to evaluate potential borrowers and reduce the risks of lending. In this we present our observations and insights on evaluating risks and protecting your assets and collateral.
The large number of assets and property rights to the borrower's lender is no guarantee banks as well as the lack of the company's debt also an indicator of lower credit risk
Asset based lenders use SWOT analysis to evaluate potential borrowers and see their past credibility.
Agree with Mr. Gorge & Ms. Renu
I agree with the Answer added by: georgei assi مدير حسابات 29 days ago
