HMP has been very successful, in the appropriate situations, being engaged and employed directly by the lender. This has been especially applicable in situations where the lender suspects fraud or gross mismanagement. This structure precludes any duty to the borrower as the client and allows our firm to aggressively represent the interests of the lender. HMP is paid directly by the lender while the resulting fees and expenses are simultaneously passed through directly to the subject loan balance(s).
- Forensic accounting and fraud detection
- Business plan evaluation
- Financial accounting analysis
- Operational analysis
- Cash flow forecasting
- Cash management / working capital analysis
- Competitive analysis
- Product analysis
- Industry analysis
- Other analysis (Employee compensation / benefits)
- Key employee retention plans
- Management Information Systems analysis
- Collateral review
- Inventory review / testing
- Accounts receivable review / testing
- Accounts payable review / testing
- Real property evaluation
- Analysis of intangible assets
Borrower Assessment Program and Asset Valuation
HMP offers its lender clients an expedited assessment product to provide an immediate overview of a borrower’s viability and asset liquidation scenarios. This assessment is a tool used by lenders needing to make a decision to support a chronically troubled borrower, or enforce their rights under the loan agreement.
The assessment focuses on liquidity (current cash balance, projected weekly cash flows, vendor support, underutilized assets, and access to capital); customer composition (sale terms, criticality of product, concentration of sales, and customer financial strength); borrower products and services (defensibility, SKU profitability, and switching costs); and operating costs (bill of materials, SG&A components, outsourcing alternatives, and composition of creditors).
This report, which includes time on-site with the borrower, is most often completed and submitted to the lender within 10 to 14 days from the start of the project and is intended to provide a measured view of the borrower’s going concern viability. The assessment also provides a liquidation analysis which includes a projected recovery by asset class, a timeline for the liquidation, the personnel needed to execute the wind down, and an analysis of the related carrying costs. These analyses are thoughtfully reviewed, and HMP will then recommend a course of action based on over twenty-five (25) years of lending workout experience. HMP’s principals have hands-on experience in a wide array of industries and with borrowers of all sizes.
After delivery of the assessment, often the lender elects to retain HMP regardless of the path taken. This future engagement may range from periodically testing the viability assumptions in a lender support scenario, or to orchestrate an orderly liquidation of the borrower.
HMP strives to provide timely, accurate and actionable information upon which it can make proper recommendations and its clients can make fully-informed decisions. This mindset leads to reporting that focuses on substance, not slick slides.
To get started, give us a to discuss any borrowers you have identified for review. From there, we will create a proposal and action plan that outlines the stages of the assessment and the related costs. We strive to offer solutions that have recognizable benchmarks so the parties can have defined milestones in terms of work product, results and fees.