Business Loan Basics - v13 (Course Id 2185)

• Who is this course for?
  This course is for anyone needing Continuing Professional Education (CPE), particularly CPAs, accountants, and finance professionals looking to deepen their understanding of business loan fundamentals.

• What is this course about or what problem does this course solve?
  This course provides essential knowledge about business loans, helping professionals understand when and why loans are needed, how they are structured, and how to navigate the loan application and approval process.

• How can the knowledge from this course be used?
  Learners can apply this knowledge to evaluate business funding needs, structure loans more effectively, interpret key loan documents, and advise clients or stakeholders on financial decisions involving loans.

• Why is this course important to a CPA, Accountant, or IRS Enrolled Agent?
  Understanding business loans is crucial for CPAs and accountants who advise businesses on financial health, as it helps them assess loan suitability, ensure proper accounting treatment, and identify risk and compliance issues.

• When is this course relevant or timely?
  This course is especially relevant during periods of economic uncertainty or business expansion when companies are likely to seek external financing and need informed guidance on borrowing decisions.

• How is a course like this consumed or used?
  The course is delivered as a NASBA QAS self-study text, allowing participants to read the material, complete review questions, and take a final exam online at their own pace to earn CPE credit.

Business loans are a vital source of funding for cash flow management. The course begins with ratio analysis and cash flow projections to determine whether loan funding is needed. I then explain how leverage (the use of borrowed funds) magnifies returns but increases risk.

We’ll then explore key loan components like different ways interest is calculated, types of fees, and the multiple terms that can be structured into a loan.  Basic accounting entries and financial statement presentation, including footnote disclosure, are explained. 

You’ll discover ways to reduce the interest rate on your loan. I’ll give an overview of the application process and the documents lenders frequently request.

The course explains the factors and ratios banks used to decide whether to approve a loan. Key documents that are signed at loan closing are described, and the importance of each is explained. I’ll point out important clauses included in these documents.

The author has 20 years of banking experience, including being CFO of two banks, sitting on loan committees, and having a collections department report to him. He provides insights into how banks operate, key terms borrower miss, and tips to protect you or your client’s business.

NASBA QAS - Text - NASBA Registry - 2185

Course Learning Objectives

• Explore different types of business loans
• Recognize key loan terms and their definitions
• Identify key loan documents
• Discover loan accounting and financial statement presentation

Chapter 1 - Business Loan Basics

Section 1: When and Where to Get Business Loans

1.1 Introduction

1.2 When Should You Get a Loan?

1.3 Cash Metrics

1.4 Cash Flow Projection: The gold standard for estimating your future cash needs

1.5 Cash Flow Projection

1.6 Leverage: Magnifying your Returns - and Your Risk

1.7 Where to Get Loans

Review Questions #1

Section 2: Loan Terms, Interest, and Fees

2.1 Principal and Interest

2.2 Loan Terms

2.3 Types of Loans

2.4 Fees

Review Questions #2

Section 3: Getting the Best Pricing and the Application Process

3.1 The Application Process: Navigating the Maze

3.2 Getting the Best Pricing You Can

3.3 Underwriting: How lenders determine if you qualify for a loan

3.4 Government Loan Programs

3.5 Loan Documents: Know what you're signing and what to pay attention to

3.6 Financial Statement Presentation

Review Questions #3

Glossary/Index