Personal Tax Returns and Cash Flow – Focus on Global Cash Flow as an Underwriting Tool for Businesses and Owners 2023 | Graduate School of Banking at the University of Wisconsin - Madison | 3 October 2023 | Webinar

This program reviews most common approaches used by bankers, plus some of the analytical and conceptualize issues encountered. For instance, when comparing global cash flow to the combination of business and personal debt, how does your bank’s approach treat business debt service where the individual is a minority owner of the business? What changes when the minority owner guarantees at a higher percentage than his or her ownership percentage? Why do you need to have personal taxes and living expenses in the model (or adjust the debt-service-coverage target higher if no personal taxes and living expenses are being included)? How do you define the business cash flow? At what point should global cash flow cease being a primary underwriting tool and shift to a secondary role (become more of a global analysis)?

Specific subjects that will be covered during the seminar:

• Versions of GCF being used by bankers and regulatory comments on global analysis
• Analytical and conceptual issues:
• Mixing two approaches to debt coverage
• Giving credit for business earnings or amount distributed
• Using averages for debt coverage ratios
• Selecting a measure of business cash flow
• Incorporating business debt service
• When to recognize that the business itself or a real estate project should stand on its own, a global cash flow “can’t make a bad loan good,” and you should shift to more of a global analysis involving an assessment of contingent liabilities of the owner(s)
• Some tax return basics/issues along the way

2023 Speaker

PRESENTER:

Richard Hamm
Founder, Bristol Gate Capital Partners