Corporate Debt Servicing Capacity
Assessments of Debt Servicing Capacity are a Key Element of Loan Approval Processes and Feature in the German Regulations for Minimum Risk Management Requirements (MaRisk)
Loan approval processes generally assess corporate debt servicing capacities on the basis of projected cash flows. Credit providers, before making larger financial commitments, may analyze annual financial statements or net income accounts to derive the debtor‘s debt servicing capacity. When smaller loans are requested, however, analyses of annual financial statements or net income accounts are rarely performed: decisions must be made quickly, and relevant data are either unavailable or can only be procured through an administrative effort that seems disproportionate and unwarranted by the circumstances.
Creditreform Rating has developed a new 2-stage model that allows its clients to assess debt serving capacities for both large and modest financial commitments. Our tried and tested interface solutions support your data provision as well as your integration and implementation processes.
Debt servicing capacities are established in four steps: