SME Financial Analysis

Our SME Financial Analysis course leader is a professional banking and finance trainer who, for 16 years, has been training students in banking, finance, SME credit analysis, debt restructuring, loan workout, risk management, strategic management and corporate governance compliance. Cooperating with some of the world’s leading training companies, he has trained delegates from some of the largest industrial and financial institutions across Europe and the Middle East.

In parallel to his lecturing career, he has a 25-year career in SME banking and finance, initiated in the City of London. A core element of his work through Capital Advisers is helping companies restructure their debt and equity position to strengthen company viability through their restructured Balance Sheets. It is this practical, hands-on experience of balance sheet restructuring that he brings to courses and workshops he develops for clients.

In 1993, he joined Hill Samuel Bank, the London-based merchant bank, covering International Project Finance and later became a credit analyst in Asset-Based Finance, lending directly to international shipping companies. He briefly joined N M Rothschild in London as a member of the bank’s LBO credit team, analysing clients and providing leveraged debt facilities to UK corporations. This was before joining Charterhouse Bank in 1997, where he began his Corporate Finance career. Assisting companies to strengthen their balance sheets through debt and equity restructuring has been part of his professional work since he started in banking.

In late 1999, he joined EBRD as the bank’s acting Deputy Director for Romania. In this role, he led teams of credit analysts in identifying and completing a significant number of credit facilities for Romanian and international companies. In 2002, during his last year in this role, EBRD financed a total of €500 million in debt and equity financing for projects in the country.

In 2003, he established an investment banking advisory firm which focuses on credit arrangements, capital restructuring, M&A, private placements and IPOs. He and his team work with regional and international clients in restructuring client company balance sheets. Central to this role is identifying companies with good potential credit ratings that will become attractive clients for international banks and financiers. In 2006, his advisory became the exclusive representative of HSBC Investment Bank in Romania.

In parallel, our trainer initiated his career as a professional lecturer in 2003, applying much of the knowledge that he has built up over his extensive banking career, training and developing banking delegates. He is currently developing several tailored courses for leading banking and financial institutions across China, Europe, the Middle East and the Far East. He trains in both English and Spanish.

SME Financial Analysis training addresses the specific areas of holistic credit risk analysis for SMEs:

• Understanding the core financial metric areas that bankers need to analyse in assessing the credit risks of an SME corporate client.
• Identifying reasons why businesses typically face problems and mitigating potential risks through credit structuring.
• How to use the company accounts and financial statements as a means for assessing the credit risk of an SME corporate finance client; what to do when those financial statements might not be fully reliable.
• Quantitative analysis of the corporate company through the use of company accounts and analysis.
• Explore the Core ratios used to assess the financial analysis of SMEs and their acceptable levels in terms of credit analysis.
• Management due diligence of financial and working capital management, and therefore, understanding how well the SME is managing its liquidity.
• Reviewing the importance of cash flow statement analysis and cash flow forecasting to assess the SMEs' ability to honour their debts.

In many ways, it is easier to lend a billion Pounds than a million. When lending to large corporations, the banker usually has the comfort of assessing the business activities and cash flow generation of large, stable companies, with a stable client base. They can also rely on a professional management team running the business and adhering to principles of good corporate governance. In lending to Small and Medium enterprises, the credit officer faces a range of different risks and uncertainties that are often more difficult to assess.

SMEs are also at their most vulnerable during an economic downturn. The current economic crisis that has engulfed European and global economies is no ordinary recession. The current downturn is not unique in its depth and severity, but like the COVID-19 pandemic, it does not discriminate between strong and weak companies. Closing the economy for months at a time will simply kill off those companies, particularly SMEs that do not have the liquidity to survive this period.

This course focuses on the financial analysis of SMEs and covers those important areas of SME financial statements analysis, very often completed when complete financial information is not always available or reliable. This session is heavily focused on the need to assess SME business liquidity and SME cash flow management, as well as areas of cash flow forecasting for SME companies that frequently do not have significant assets to provide bankers as security for SME loans.

Redcliffe Training's SME financial course is designed for bank relationship managers, corporate credit analysts and credit risk management at financial institutions, who lend to Small and Medium-sized corporate clients or who are seeking to make the transition to SME lending. This course provides a full, holistic review of financial, quantitative credit risk analysis for SMEs, which are frequently different to those assessing the credit risk of large corporations.

In addition, participants will cover a range of applied techniques in assessing key financial areas of SMEs' credit risk analysis and of financial statements that cannot always be relied upon to provide a true or fair view of the company. The course also places a heavy emphasis on cash flow forecasting for ‘asset-light’ high-potential SME companies that frequently cannot provide sufficient secondary sources of debt repayment as security for their SME loans.

Methodology

Learning techniques are a mixture of formal presentations, written materials, assignments and case studies with a heavy emphasis on learning through analysis of practical examples. All case studies are taken from real-life working examples and may include client companies of the bank, particularly non-performing loans. Sharing already developed knowledge and learning to work closely in solving practical issues is core to the learning methodology of this programme.

This session is designed with active delegate participation as a core theme throughout. Delegates are required to present findings and solutions to colleagues. Pre-course reading and preparation are required by delegates.

Delegate Knowledge

Delegates are understood to be at an intermediate stage of their professional banking careers with significant basic knowledge of credit issues and credit decisions learned in the workplace. It is assumed all delegates have developed knowledge of Excel and its application in forecasting company financials, as this will be a key learning tool.

In undertaking the financial analysis of SME case studies, you are provided with Microsoft Excel worksheets to devise financial ratios that form part of this SME financial analysis. A working knowledge of Microsoft Excel will therefore be an advantage, but not a requirement for completion of the course.