Underwriting Methodologies

In the Asset Finance underwriting process complex decisions being made everyday. There is a concentration of expertise at the top of the Risk pyramid, what is happening at the lower levels of the Risk pyramid when staff are not being trained ? Is there a loss of organisational memory?

Underwriting is not an exact science, what are the strengths and weaknesses of:

Behavioural underwriting

  • When do we use it and why

  • Thresholds

  • Financing structure

Gap based underwriting

  • When do we use it and why

  • Thresholds

  • Financing structure

Cashflow underwriting

  • Financial Analysis

  • Rational for investment

  • Market and Management

  • Gap analysis

  • Financing Structure

Balance Sheet underwriting

  • Financial Analysis

  • B/S structure

  • Burn rate

  • Access to additional equity / borrowings

  • Funding structure

Specialisation

  • The benefits of tailored underwriting