Our Services

As a commercial lender, you need close management and ongoing monitoring of your more risky customers that are struggling due to high leverage, poor liquidity, or adverse industry trends—or a combination of all three. That's where ABL Exam Pros can help. Our Asset Based Lending exam services provide thorough, confidential review of your customer's books and records with particular emphasis on the collateral and cash.

We look to assess internal accounting controls; people, systems and policies; and actual quality of the collateral. We perform test counts of inventory; tour warehouses; and review the general ledger, receivable account activity, cash and checks, insurance, and accounts payable. After all the information is gathered, our experts carefully document our findings in Excel files and provide a solid, reliable report that highlights the main issues, and propose recommendations to minimize risk and ensure that the bank's exposure is covered by collateral.

The bottom line is that ABL Exam Pros helps ensure that you're performing due diligence to expose and mitigate risks, allowing you to make better informed decisions.


Our Exam Services

  • Survey Exams
  • Recurring Exams
  • Pre-Funding Exams
  • Cash Exams
  • Collateral Monitoring
  • Special Request Exams
  • Work Outs
  • Verifications

Getting the Details You Need Most

ABL Exam Pros provides specific focus and attention on what matters to you most—cash and collateral (receivables and inventory). Our reliable, accurate exams will seek to determine:

Cash

  • Follow the cash
  • Understand the origin of deposits
  • Understand where the cash goes, what cash is used for
  • Are the owners taking cash out of the business?
  • Do any expenditures seem out of line with the type of business?
  • An analysis of cash can confirm if rent, loan payments, or taxes are current
  • An analysis of cash can help to reveal the true turnover of receivables and payables
  • Will the customer have adequate cash flow going forward to meet debt service needs?

 

Receivables

  • Evaluate receivables for performance risk or contractual conditions that may limit collectability in a liquidation scenario
  • Review receivable aging to ensure that receivables have not been refreshed and determine if the aging may be relied upon
  • Review receivable activity to determine the nature of credit memos or other non-cash reductions to receivables; calculate dilution and a receivable turnover
  • Review payment performance of receivables to determine what items are slow and whether potential write-offs loom
  • Review receivable trends to determine if they are in-line with sales trends or determine if other factors may have affected the AR level
  • Recommended receivable ineligibles may include: receivables over 90 days old (this may vary depending on the industry), uncollectible receivables, cross-age, contras, employee, related parties, foreign, deposit offsets, government or contract—or determine if special conditions exist where these exclusions may not apply

 

Inventory

  • Understand and evaluate inventory costing method
  • Evaluate overall inventory controls including the method of tracking (ex: perpetual) and adequacy of storage conditions
  • Recommended inventory ineligibles may include a reserve for slow-moving or obsolete inventory, inventory at outside locations, consignment inventory, inventory with a purchase security interest, damaged items or items with quality issues, mismatched inventory, perishable inventory, and possibly work in process, inventory under restricted license, and custom inventory to name a few.
  • Test count inventory to determine accuracy of perpetual or other reporting system
  • Evaluate liquidation market for certain inventory items and recommend an advance rate

During Our Exams

Our highly detailed exams involve a number of activities designed to discover financial truth:

  • Unusual cash disbursements
  • Irregularities in the booking and record-keeping of receivables
  • Inconsistencies in presentation of inventory numbers
  • Slow-moving or obsolete inventory
  • Weaknesses in inventory costing methods that affect collateral values and lead to mistakes in income statement reporting
  • Liabilities that affect the liquidation value of collateral like customer deposits or deferred revenues
  • Purchase security interests against inventory
  • Hidden risks such as past due payroll, real estate or sales taxes, union disputes, environmental or hazardous waste issues

Other Services We Provide
  • Financial Modeling
  • Loan Review
  • Credit Write-Ups and Reviews