Lender's Services: Due Diligence and Workout Assistance

Comprehensive Lender’s Services along the entire credit process:

Before provision of financing

Keystone Financial Services, Inc. (KFSI) supports lenders in their assessment of borrower’s financial strength. We provide Field Examinations, Quality of Earnings, and other due diligence services.

KFSI Due Diligence Analytics

  • Analysis of prospective borrower’s financial position and performance as well as cash flows prior to provision of financing

  • Budgeting accuracy based on historical budgets and variances between budget and actual results

  • Analysis of working capital requirements and its seasonality

  • Analysis of the cash level projections and cash requirements in the financing period (including ability to repay debt)

  • Periodical analysis (monitoring) of borrower’s financial position and performance as well as cash flows in the financing period

  • Periodical analysis (monitoring) of borrower’s projections (including profit and loss account and cash flows)

  • Assessment of borrower’s market position

  • Analysis whether debt covenants stipulated in credit agreements are met

  • Identification of assets that might potentially be sold for the purpose of repayment of the financing

  • Identification and estimation of other significant commitments and contingent liabilities that might endanger financial performance or otherwise adversely affect the borrower's financial position

  • Operational due diligence of the borrower

 

KFSI provides Field Examinations, due diligence, workout assistance, investigative services and internal audit services for banks, independent finance companies and investment funds. We deliver timely, customized reporting that meets the needs and specifications of our clients.

Workout Assistance Service

KFSI helps lenders with borrowers who are in default or showing signs of financial weakness. Our team of experienced professionals quickly designs and implements a plan to avoid default or maximize recovery value for the lender. By combining wide-reaching financial, operational, and management expertise with in-depth industry knowledge and executive leadership, KFSI has developed a successful track record in maximizing recovery value in the most complex situations. KFSI brings a broad range of skills to companies experiencing the effects of unfavorable business conditions.

 

KFSI’s efficient and cost-effective Workout Assistance solutions include ongoing support to special assets managers and workout officers overseeing the restructuring or liquidation of the borrower. We also established ourselves as a successful alternative for filling positions such as CEO, CFO, and COO, at companies looking to stabilize operations and restore credibility while executing new or revised business strategies. We work closely with lenders, borrowers, investors, and creditors to identify critical business issues and implement strategies designed to maximize liquidity and enhance profitability.

During restructuring of financing

Integrity Monitoring

KFSI assists lenders with borrowers who have violated lending agreements, misrepresented collateral values, or misstated their financial performance, resulting in a loss of trust between lender and borrower. Our efficient and cost-effective solutions include ongoing support to account executives managing troubled credits.

 

KFSI’s Integrity Monitoring services are based on agreed upon procedures and can include onsite monitoring of borrowers & collateral and regular updates of key data and loan-to-collateral values. Our flash reports keep lenders apprised throughout the month and include key matrices providing lenders a quick snapshot of borrower's performance.

In the course of the credit monitoring process

Collateral Monitoring

KFSI provides collateral monitoring services for lenders on a daily, weekly or monthly basis. Whether it is a complex deal requiring extra monitoring time, or an entire portfolio, KFSI can assist.

 

Prior to funding, our team of professionals work with borrowers and lenders to set up necessary arrangements including lockbox accounts, bank account access, and reporting. KFSI then uses an established process for reporting the collateral loan status. This includes review of all downloaded deposit information, analysis of accounts receivable aging and inventory reports (ineligibles are also computed), data entry into the collateral tracking system, and periodic collateral loan status reports as well as a customized monthly report packages designed to satisfy the lender’s specific needs.

Quality of Earnings

KFSI Quality of Earnings analysis reaches beyond reported financials. Our professionals look beyond the financial statement numbers to identify potential issues. We ask the difficult questions to gain an understanding of the borrower’s accounting processes, and tests the strength of the borrower’s balance sheet and quality of earnings.

 

While Field Examinations focus on the balance sheet, the QE report is designed to provide a professional third-party analysis of revenues and cash flows. Our QE report helps lenders evaluate the recurring nature and quality of the operations and cash flows, as well as the underlying assets and liabilities of the business. We evaluate the borrower’s control systems and important elements of its operations including by client, industry, product line or other relevant metric.

Field Examinations

KFSI Field Examination are designed to independently assess the borrower’s assets and debt-service capability. Our broad experience with enterprises, both large and small, across a broad spectrum of industries, enable us to quickly grasp your borrowers’ financial drivers and collateral issues. We assist lenders with designing appropriate procedures to address the issues and risks associated with a particular credit.

 

KFSI performs all Field Examination services in accordance with agreed-upon procedures as requested by the lender. We offer borrower-specific Field Examinations developed in collaboration with the lender, as well as template-based Field Examination. Our goal is to provide lenders with quality information in a timely manner. Our reports include the results of our procedures, as well as business insights and recommendations to help in credit decisions.