Implementing a Rules-Based Early Warning System for Asset-Based Lending

e-Book

Implementing a Rules-Based Early Warning System for Asset-Based Lending

July 23, 2016
Flipbook

Develop, implement and maintain a rules-based early warning system (RBEWS) specifically for asset-based lending. Asset-based lending is inherently different from the more traditional cash flow lending; instead of relying on the cash flow from the business to repay the loan, ABL lending relies on the cash conversion of the collateral to repay the loan. In fact, many ABL borrowers would not qualify if viewed through the lens of traditional cash flow lending. Because of that inherent difference, financial institutions need to develop ABL-specific early warning risk models.

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