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LENDING TO BUSINESS FIRMS AND PRICING BUSINESS LOANS - Coggle Diagram
LENDING TO BUSINESS FIRMS AND PRICING BUSINESS LOANS
Short-Term Loans to Business Firms
Security Dealer financing
SNCs
Interim construction financing
Self - liquidating inventory loans
Asset -based financing
Working Capital loans
Retailer and equipment financing
Financial Ratio Analysis
Coverage Ratios
Marketability of Product or Service
GPM = (Net sales-Cost of goods sold)/ Net sales
NPM =Net income after taxes/ Net sales
Liquidity Indicators for Business Customers
Operating Efficiency
Net sales/Net fixed assets
Net sales/Accounts and notes
receivable
Net sales/Total assets
Average collection period =Accounts receivab / (Annual credit sales : 360)
The annual cost of goods sold/Average
inventory
Profitability Indicators
After-tax net income / total assets (or ROA)
After-tax net income/ net worth (or ROE)
Before-tax net income / total assets, net worth, or total sales
After-tax net income/ total sales (or ROS) or profit margin
Control over Expenses
Taxes/Net sales
Selling, administrative, and other expenses/Net sales
Cost of goods sold/Net sales
Interest expense on borrowed funds/Net sales
Wages and salaries/Net sales
Overhead expenses/Net sales
Depreciation expenses/Net sales
Financial Leverage
Methods for pricing business loans
Below-Prime Market Pricing
CPA
Cost-Plus Loan pricing Method
Price Leadership Model)
Long-Term Loans to Business Firms
Revolving Credit Financing
Long-Term Project Loans
Term Business Loans
Loans to Support the Acquisition of Other Business Firms-Leveraged Buyouts
