Avoiding Costly Mistakes in Calculating Debt Service Coverage

Inadvertent errors in calculating debt service coverage can be costly. It is critical to accurately determine a borrower’s ability to repay, especially with today’s unstable economy. Discover how to avoid mistakes while learning more about making accurate determinations and prudent decisions.

AFTER THIS WEBINAR YOU’LL BE ABLE TO:

• Identify potential vulnerabilities which could lead to inaccurate assessment of borrower repayment ability (debt service coverage)
• Discuss common errors in the calculation of global debt service coverage which could lead to overstated secondary repayment ability
• Distinguish between different repayment ability calculations and when each is most appropriate, including traditional EBITDA coverage, free cash flow, and uniform credit analysis
• Recommend the level of financial statement assurances which will lead to the most confident lending decision, given loan amount, transaction, and borrower complexity
• Understand common weaknesses in the institution’s development of repayment ability as found through third-party, independent loan reviews

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