Also during the covid crisis, banks have to look at the credit risk. Although the liability ceilings are being raised and state guarantees facilitated, there remains a residual risk with the house banks, which must take their own precautions to limit losses. It is precisely this unprecedented situation and the uncertainty it creates that require valid decisions to be made when granting new loans and guarantees and when extending credit lines. This is particularly relevant when things have to move quickly given that many banks are affected by This means that things have to happen quickly given that many of the banks suffer from a shortage of staff.
An Independent Business Review (IBR) facilitates decision making for banks that face a multitude of credit checks and is an important part of the documentation, particularly in borderline cases. For companies that now need loans to maintain liquidity urgently, an IBR can speed up and simplify loan processing. This applies particularly if the company has already reported lower sales and earnings levels prior to covid.
In essence, the question is whether the performance slump is only temporary and induced by the covid crisis or whether it will be a permanent issue. This often requires an external assessment of the borrower’s current situation by an independent advisor with a trained eye on earnings drivers, market positioning, operational performance and the future viability of the business model.
What you can expect from us at the Independent Business Review:
- Business model: Evaluation of the business model; customer value analysis, supply chain; sustainable positioning and competitive advantages – also taking into account changed requirements due to digitalisation; strengths/weaknesses proﬁle, technical basis (including realistic capex requirements)
- Financial analysis: Analysis of the ﬁnancial status-quo; critical assessment of the short- to long-term earnings, asset- and financing forecast; sustainable debt service capacity to repay the increased financing volume; rolling liquidity forecast in our integrated model; sensitivity analyses
- Assessment of future viability: Analysis of future scenarios; (brief) assessment of corporate strategy; market forecast; opportunity/risk proﬁle
- Options for action: Identifying fundamental alternatives; measures to reduce costs and increase efﬁciency; long-term action parameters beyond covid
The IBR based on IDW S6 is an independent assessment of the borrower, especially when things have to move quickly and a brief appraisal is sufficient. A lender (or non-operating shareholder) thus receives a well-founded, transparent and accurate decision-making basis for renegotiating or adjusting existing loan and other contractual terms. The maconda analysis is comprehensive and, in addition to the indispensable ﬁnancial outlook also includes, above all, the future viability of the business model, the market and competition, the customers and suppliers as well as the necessary technical basis. This distinguishes us from auditors, whose focus is clearly on the numbers, but not on the market conditions that are so important for the future.
In doing so, we do not simply allow market assessments to be explained or even dictated to us by the management, nor do we rely on just any market study just because a presumably well-known name is behind it, but look very closely and validate external factors precisely and with a high degree of accuracy. The results are summarised in an informative report that meets our usual high standards.