Evaluating, Underwriting, and Lending to Construction Contractors
About This Course
Lending to construction contractors is risky business, but this live webinar will show you how to evaluate that risk using the contract status report. The construction industry accounts for 10 to 20% of a local economy, so extending credit thoughtfully to this sector benefits both your organization and the market you serve. A Contract Status Report outlines the current state of contracts within a construction project. It provides a snapshot of the progress, potential risks, and financial implications of each contract. This report serves as a vital tool for project managers, stakeholders, and team members to assess the health of the project and make informed decisions. With a few items from the financial statements, you can use the contract status report to calculate a contractor’s cash flow repayment ability.
Topics covered in this session
- Percentage of Completion vs completed contract accounting
- Contractor status report and key elements in contractor accounting and financial statements
- Progress billings--retention and collateral value
- Jobs in progress vs completed jobs
- Total contract revenue, change orders, % of completion, billings to date
- Revenues earned, cost of revenues, gross profit
- Total estimated costs, costs to date, estimated costs to complete
- Billings, underbillings and overbillings
- Deferred income taxes
- Evaluating contractor downside and most likely cash flow for repayment ability based on contract status report
- Useful conditions and covenants in contractor loan underwriting
Who Should Attend
- Commercial bankers
- Commercial real estate lenders
- Credit analysts
- Credit department staff
- Loan underwriters
- Loan review officers
- Credit department managers
- Senior lenders
- Chief credit officers
*This program does NOT qualify, nor meet the National Standard for NASBA accreditation.
Your Instructor
A frequent speaker, instructor, advisor and writer on credit risk and commercial banking topics and issues, Martin J. "Dev" Strischek is principal of Devon Risk Advisory Group based near Atlanta, Georgia. Dev advises, trains, and develops for financial organizations risk management solutions and recommendations on a range of issues and topics, e.g., credit risk management, credit culture, credit policy, credit and lending training, etc. Dev is the former SVP and senior credit policy officer at SunTrust Bank, Atlanta. He was responsible for developing, implementing, and administering credit policies for SunTrust’s wholesale lines of business--commercial, commercial real estate, corporate investment banking, capital markets, business banking and private wealth management. Prior to SunTrust, Mr. Strischek was chief credit officer for Barnett Bank’s Palm Beach market. Dev is also a member of the Financial Accounting Standards Board’s (FASB’s) Private Company Council (PCC).
This course is covered under team memberships.
See Team Memberships