Credit Evaluation School Instructor eBook - Oct 2023

People:

Borrower: Paul Senior Cycles, Inc. Guarantor: Paul Senior Local motorcycle mechanic who owns own shop.

Purpose:

4 ‐ year fully amortizing note to fund 80% of the cost of equipment being purchase

Payment:

Annual debt service requirements: $25M Annual debt service available: $15M DSCR: 0.60x

Protection:

Secured by all borrower’s business assets valued at roughly $125M LTV: 80%

Problem:

Late history: 10/06/00 Loan is currently 74 days past due Overdraft on checking of $5M

Prospects:

Borrower said he will be in to pay loan and make deposit within three days as large customer just paid outstanding invoices.

Commercial Credit Quick Hitter – Classified DSCR 0.60x Late history Currently 74 days late 80% LTV Has not gone 90 ‐ days past due Borrower reports will be in to make payment, but DSCR still low and late history.