This 2-day change program is designed to be immersive, practical, and directly anchored on the client outcomes that bankers think about.
It is framed in a “Before vs. After” structure using real-life lending scenarios where bankers apply different facilities and see how the choices affect business growth, risk, and Expected Credit Loss (ECL).
Minimal theory, maximum hands-on case work.
—
Duration: 2 Days (8 hours/day)
Format: Case-based, interactive, outcome-focused
—
Day 1: Foundations in Balanced Banking – Shifting Mindsets
Morning – Setting the Frame
Welcome & Objectives – What it means to be a Balanced Banker.
Framework Recap – Risks, Structures, Actions ( Keep this brief)
Toolbox for Practical Analysis:
AWC (Adjusted Working Capital) vs. NWC (Net Working Capital) → practical lens for liquidity.
DSCR only in context of amortising term loans. No over-engineering.
Case Block 1: Real Estate Developer – Before vs. After
Before: Bank offers short-term overdraft to fund land acquisition. Client runs into liquidity crunch → delays in construction → higher ECL.
After: Structured facility with staged drawdowns, escrow on presales, and clear repayment waterfall → project completes, sales realised, losses avoided.
Exercise: Participants design 2–3 alternative facilities; simulate impacts on AWC and ECL.
Case Block 2: SME Trader (Import/Export)
Before: Simple revolving loan granted against receivables. Receivables from high-risk counterparty default.
After: Documentary credit-based structure with margin + discounting → reduces risk concentration, improves cash conversion.
Exercise: Participants compare “before” vs. “after” funding gaps, risk-adjusted outcome, and ECL impact.
—
Afternoon – Hands-On SME Applications
Case Block 3: F&B Operator (Restaurant Chain)
Before: Single term loan for capex fit-out, no attention to working capital cycle → cash crunch, defaults.
After: Split structure: equipment term loan + seasonal WC line + supplier financing → growth sustained, DSCR met.
Exercise: Participants recast facilities; evaluate risk reduction and repayment clarity.
Case Block 4: Equipment Reseller (B2B)
Before: Lump-sum WC loan granted → mismatched against inventory cycle, stock obsolescence.
After: Floorplan financing (inventory-backed), revolving facilities tied to confirmed orders → inventory turns quicker, reduced ECL.
Exercise: Participants restructure facilities, simulate ECL calculation with different structures.
Reflection: Pull out patterns from Day 1 — how facility structuring shifts outcomes.
—
Day 2: Advanced Applications – Client Partnership in Action
Morning – Complex Scenarios and Sector Spread
Case Block 5: SME Manufacturer (Metal Components)
Before: Over-reliance on single buyer, financed via overdraft → concentration risk crystallises.
After: Receivables purchase program + LC-backed trade lines, diversifying buyer risk → liquidity sustained, ECL reduced.
Exercise: Map repayment sources to facility types; participants redesign facility mix.
Case Block 6: Services SME (IT Consultancy/Contractor)
Before: Bank funds long receivables cycle with general WC loan → project delays = defaults.
After: Milestone-based financing linked to client progress payments.
Exercise: Participants link AWC to project cycles; compare NWC vs. AWC.
—
Afternoon – Integration & Client Advisory
Capstone Simulation: Multi-SME Portfolio
Bankers work in groups, given 5 SME profiles (real estate, trader, F&B, equipment reseller, manufacturer).
Each group designs a “Before vs. After” facility set:
Choose financing instruments
Assess repayment sources
Calculate impact on AWC/NWC, DSCR (if term loan), and ECL.
Groups present → debate trade-offs, outcomes, and risk-adjusted returns.
Wrap-Up & Action Plan
Key shifts from transactional to advisory banker.
Practical checklist: spotting mismatches, balancing growth vs. risk.
Commitment exercise: each banker identifies 1–2 ways they’ll apply this to current clients.
—
Program Design Principles (Built-In)
Case-driven: 70% of time is active case work, not theory.
Before vs. After framing: shows the cost of poor structuring vs. value of balanced solutions.
Sector variety: real estate → trader → F&B → equipment → SME services → manufacturer.
Facility choice matters: bankers experience how overdraft vs. LC vs. receivables financing vs. term loan affects repayment, AWC, and ECL.
Simple financial tools: only AWC vs. NWC, and DSCR (where relevant).
—
In this program, the bankers don’t just “learn credit” — they see how structuring changes the client’s survival and the bank’s losses in real terms.
Version 2
In this program, bankers will see with numbers that better structuring doesn’t just reduce losses, it actively creates more business opportunities.
This is the mindset shift: structuring → growth enabler, not just risk minimiser.
Thw program will shine a spotlight on business gained when bankers structure properly (e.g., FX hedging, trade terms, facility matching).
—
The Balanced Banker: Smarter Growth With Clients (2-Day Program)
Core Promise
Bankers will learn how to unlock more client business with less risk by using facility structuring, risk tools, and advisory framing.
Each case moves from “Before” (transactional, product push, higher risk, limited business) → “After” (structured, advisory, safer, larger wallet share).
—
Day 1: Structuring as the Engine of Growth
Morning – Shifting Mindset
Intro: “Risk control doesn’t kill business — poor structuring does. Smart structuring grows business and reduces losses.”
Quick toolbox recap:
AWC vs. NWC for working capital clarity.
DSCR only for amortising term loans.
FX hedging not as a product but as a structural enabler of predictable cash flows.
—
Case 1: Real Estate Developer (Residential Project)
Before:
$20m overdraft given for land purchase.
Sales delayed, cash flow lumpy. Bank limits new exposure → client halts new project pipeline.
Business lost: No cross-sell, bank stuck with a stressed client.
After:
Facility structured as:
$15m term loan (land + construction, repaid via escrowed presales).
$5m standby LC for contractor payments.
Cash inflows matched with repayment waterfall → DSCR > 1.2x.
Business gained: Client completes project, returns for $30m financing on second project. Bank cross-sells guarantees + cash management.
Numerical comparison:
Before: $20m drawn, 20% ECL provisioning, no new project → negative RAROC.
After: $20m structured, 5% provisioning, $30m follow-up → RAROC doubles.
—
Case 2: SME Trader (Importer of Electronics)
Before:
Bank grants $5m revolving WC loan.
Client exposed to USD/SGD swings, margin squeezed 10%. Defaults on one buyer.
Bank cuts exposure, client scales back imports.
After:
Structured facility:
$4m LC issuance with 80% post-import financing.
FX forward hedging locked at +2% margin.
Client sells confidently, expands imports by 30%.
Business gained: Bank provides extra $2m FX line + collections.
Numerical comparison:
Before: $5m exposure, $0 new FX income, client volume shrinks.
After: $6m exposure, $100k FX P&L for client, $20k fee income for bank, portfolio growth.
—
Afternoon – Retail & SME Cases
Case 3: F&B Operator (Restaurant Chain)
Before:
Bank grants $3m term loan for fit-out. No WC line.
Sales ramp slower than expected → liquidity crunch.
Client cancels new outlet expansion → bank loses future business.
After:
Structured facility:
$2m term loan for capex.
$1m seasonal WC line (linked to COGS cycle).
Supplier financing for top 3 vendors.
Client maintains liquidity, rolls out 2 more outlets in 18 months.
Business gained: Additional $5m financing, merchant acquiring, and payroll solutions.
Numerical comparison:
Before: $3m financed, DSCR < 1.0x, expansion halted.
After: $8m total facilities used over 2 years, DSCR > 1.3x, 3x fee income.
—
Case 4: Equipment Reseller (B2B)
Before:
$4m overdraft for inventory. Client mismanages stock, half becomes obsolete.
Bank reduces limit, client loses dealer contracts.
After:
Floorplan financing:
$3m revolving facility secured against in-transit and showroom inventory.
Tranches tied to confirmed orders.
Client increases turnover 25%, secures new dealer agreement.
Business gained: Bank wins exclusive dealer financing program ($10m portfolio).
Numerical comparison:
Before: $4m exposure, $1m provision.
After: $3m exposure growing to $10m, provision < $100k, +$50k fee income.
—
Day 2: Structuring for Expansion & Client Partnership
Morning – Advanced Structuring Cases
Case 5: SME Manufacturer (Metal Components)
Before:
$6m WC loan tied to receivables from single large buyer.
Buyer delays payments → liquidity squeeze. Bank exposure shrinks.
After:
Structured facility:
$4m receivables purchase program (diversified across buyers).
$2m LC-backed trade finance line.
Client grows export orders 40%.
Business gained: FX hedging, $8m additional lines, trade advisory.
Numerical comparison:
Before: $6m single-buyer risk, 15% provisioning.
After: $8m diversified program, 3% provisioning, $25k fee income.
—
Case 6: IT Contractor (Services SME)
Before:
$2m WC loan covering long receivables cycle. Client struggles to meet payroll → misses government contract extension.
After:
$2m milestone-based financing linked to government progress payments.
Client wins contract extension worth $10m.
Business gained: Bank finances the new contract; advisory fees.
Numerical comparison:
Before: $2m financed, contract lost.
After: $12m financed over 3 years, +$150k fees.
—
Afternoon – Portfolio Simulation
Capstone: Multi-SME Portfolio Game
Groups handle 5 clients (real estate, trader, F&B, reseller, manufacturer).
Each given “Before” facility set → redesign into “After” structures.
For each client, calculate:
Business volume unlocked.
Change in AWC/NWC.
Change in DSCR (if applicable).
ECL impact.
Cross-sell opportunities (FX, guarantees, CMS, hedging).
Presentations → compare which group grew the portfolio most with lowest risk.
—
Program Principles
Numerical proof: Every case shows how structuring grows the pie.
Client-centric: Not product pushing, but linking facilities to client cycles.
Before/After pairs: Reinforces contrast.
Simple metrics: AWC vs. NWC, DSCR (only term loans), ECL shifts.
Advisory framing: Facilities + hedging = growth accelerator.
—
Case Numerical Work
Great — below are step-by-step numerical “Before → After” worked examples for each case. I keep theory minimal, show the exact math (digit-by-digit), and focus on the metrics you asked for: AWC vs NWC, ECL (simple EAD × PD × LGD), DSCR where there is an amortising term loan, and the business/unlock & fee impact. I assume reasonable PD/LGD shifts from poor structuring → structured solution. If you want different stress assumptions, I’ll re-run quickly.
—
How I present each case
1. Short scenario recap
2. Before: facilities, key balance-sheet working capital numbers, NWC & AWC, ECL (digit-by-digit), DSCR if relevant, business outcome.
3. After: restructured facilities, new NWC & AWC, ECL (digit-by-digit), DSCR if relevant, new business unlocked and fee figures.
4. Net impact summary.
—
1) Real-Estate developer (residential project)
Scenario: Bank initially provided a $20,000,000 overdraft for land. Sales delayed → liquidity crunch. After: structured term loan + standby LC, presales escrow, clear repayment waterfall → project completes and client returns with a larger pipeline.
Assumptions (stated)
Exposure (EAD) before & after: $20,000,000.
Before PD = 30% (0.30); Before LGD = 70% (0.70).
After PD = 10% (0.10); After LGD = 50% (0.50).
After structure: term loan $15,000,000 amortising 5 years @ 6% p.a.; NOCF (net operating cash available for debt service) after structuring = $4,500,000/year.
Bank wins $30,000,000 follow-on financing (project #2); origination fee 0.5% on follow-on.
—
BEFORE
Facility: $20,000,000 overdraft (unstructured).
NWC (simple example):
Current assets (cash + receivables + inventory): $5,000,000
Current liabilities (short-term payables + overdraft): $21,000,000
NWC = Current assets − Current liabilities = 5,000,000 − 21,000,000 = −$16,000,000.
AWC (adjusted): Because overdraft is unrestricted and construction inflows uncertain, adjusted working capital is effectively worse; show an illustrative AWC = −$18,000,000 (reflects liquidity hole).
ECL (Before):
Step 1: EAD × PD = 20,000,000 × 0.30 = 6,000,000.
Step 2: (EAD × PD) × LGD = 6,000,000 × 0.70 = $4,200,000.
ECL_before = $4,200,000.
DSCR: Not applicable (overdraft, no amortising term loan).
Business outcome: Project delayed; bank receives no follow-on business. Provisioning (ECL) high; RAROC poor.
—
AFTER (structured)
Facilities:
Term loan (land + staged construction): $15,000,000 (amortising 5 yrs @ 6%).
Standby LC for contractor payments: $5,000,000 (contingent / controlled).
NWC (post structure):
Current assets (cash + receivables from presales in escrow): $18,000,000
Current liabilities (standby LC draws + short payables): $6,500,000
NWC = 18,000,000 − 6,500,000 = $11,500,000.
AWC: Escrow & staged drawdowns mean AWC = $12,000,000 (practical liquidity available).
ECL (After):
Step 1: EAD × PD = 20,000,000 × 0.10 = 2,000,000.
Step 2: (EAD × PD) × LGD = 2,000,000 × 0.50 = $1,000,000.
ECL_after = $1,000,000.
Change in ECL: 4,200,000 − 1,000,000 = $3,200,000 reduction.
Annual debt service on $15,000,000 (5 y @ 6%): (annuity formula)
r = 0.06; n = 5. Compute (1+r)^5 = 1.06^5 = 1.3382255776.
(1+r)^−5 = 1 / 1.3382255776 = 0.747258172.
Denominator = 1 − 0.747258172 = 0.252741828.
Numerator = r × PV = 0.06 × 15,000,000 = 900,000.
Annual payment = 900,000 ÷ 0.252741828 ≈ $3,560,000 (rounded).
DSCR (After): NOCF / annual payment = 4,500,000 ÷ 3,560,000 =
4,500,000 ÷ 3,560,000 = 450 ÷ 356 = 1.2635 → 1.26x (meets 1.2x target).
Business unlocked: Follow-on financing $30,000,000. Fee = 0.5% × 30,000,000 =
30,000,000 × 0.005 = $150,000.
—
Net impact summary (Real Estate)
ECL falls $3.2m despite the bank keeping the original $20m exposure.
DSCR becomes acceptable (1.26x).
Bank wins $30m follow-on business and $150k in fees.
Conclusion: structured solution stabilises cash flows → enables scalable business.
—
2) SME Trader (electronics importer / distributor)
Scenario: Revolving $5,000,000 WC line, unhedged FX exposure causes margin shocks. After: LC-backed trade lines + FX-forward programme and post-import financing (80% financing) — client grows volumes.
Assumptions
Before exposure (EAD_before) = $5,000,000.
After exposure (EAD_after) = $6,000,000 (client grows business).
Before PD = 15% (0.15), LGD = 60% (0.60).
After PD = 8% (0.08), LGD = 40% (0.40).
Client import turnover before = $20,000,000; after = $26,000,000 (30% growth).
Bank fees: LC fee 0.25% on $4,000,000; FX margin income ~0.08% on turnover.
—
BEFORE
Facility: $5,000,000 revolving WC (no hedging, concentrated buyers).
NWC example (simple):
Current assets = Cash $1,000,000 + Receivables $6,000,000 = $7,000,000
Current liabilities = Payables + overdraft = $9,000,000
NWC = 7,000,000 − 9,000,000 = −$2,000,000.
AWC: Without structure, receivables realisable lower (no factoring): AWC ≈ −$2,500,000 (worse).
ECL (Before):
Step 1: 5,000,000 × 0.15 = 750,000.
Step 2: 750,000 × 0.60 = $450,000.
ECL_before = $450,000.
Business outcome: Client reduces import volumes after a big FX hit; bank loses FX revenue and cross-sell.
—
AFTER (LC + FX programme + post-import finance)
Facilities: LC issuance $4,000,000 + post-import finance (80% of invoices) → net bank exposure rises to $6,000,000 as client scales.
NWC:
Current assets (cash + factoring effect) = $3,500,000
Current liabilities = $2,000,000
NWC = 3,500,000 − 2,000,000 = $1,500,000.
AWC (adjusted for receivables financing): factoring + LC control → AWC ≈ $1,600,000.
ECL (After):
Step 1: 6,000,000 × 0.08 = 480,000.
Step 2: 480,000 × 0.40 = $192,000.
ECL_after = $192,000.
Change in ECL: 450,000 − 192,000 = $258,000 reduction.
Fee & income:
LC fee = 0.25% × 4,000,000 = 4,000,000 × 0.0025 = $10,000.
FX margin income ≈ 0.08% × 26,000,000 = 26,000,000 × 0.0008 = $20,800.
Total immediate fee income ≈ $30,800.
Business unlocked: Turnover ↑ $6,000,000 (from 20m → 26m); bank expands trade & FX wallet.
—
Net impact (Trader)
Despite exposure increasing ( $5m → $6m ), ECL falls by $258k.
NWC / AWC flip from negative to positive.
Bank wins recurring FX income and LC fees (~$30.8k) and larger credit wallet.
—
3) F&B operator (restaurant chain roll-out)
Scenario: Single $3,000,000 term loan for fit-out, no WC → cash shortfalls; expansion stopped. After: split facilities (capex loan + seasonal WC + supplier finance) → outlets expand and overall bank wallet grows.
Assumptions
Before total EAD = $3,000,000.
After: still $3,000,000 initially on books, but used across product types (2m term + 1m WC).
Before PD = 20% (0.20), LGD = 60% (0.60).
After PD = 10% (0.10), LGD = 45% (0.45).
Term loans amortise over 7 years @ 8% p.a.
Before NOCF (operating cash available) = $160,000/year. After NOCF = $520,000/year (better working capital & supplier finance accelerate sales).
—
BEFORE
Facility: $3,000,000 term loan only (no WC).
NWC:
Current assets = Cash 100,000 + Inventory & receivables 600,000 = 700,000
Current liabilities = Short-term payables + loan portion = 3,500,000
NWC = 700,000 − 3,500,000 = −$2,800,000.
ECL (Before):
Step 1: 3,000,000 × 0.20 = 600,000.
Step 2: 600,000 × 0.60 = $360,000.
ECL_before = $360,000.
Debt service on $3,000,000 (7 y @ 8%):
r=0.08; n=7; (1.08)^7 ≈ 1.713826. (1+r)^−n ≈ 0.583698. Denominator = 1 − 0.583698 = 0.416302.
Numerator = 0.08 × 3,000,000 = 240,000.
Annual payment = 240,000 ÷ 0.416302 ≈ $576,600 (rounded).
DSCR (Before): 160,000 ÷ 576,600 = 160 ÷ 576.6 ≈ 0.277 → failing.
—
AFTER (split structure)
Facilities: $2,000,000 term loan (capex), $1,000,000 seasonal WC, supplier financing lines.
NWC (after): Current assets = 1,800,000; current liabilities = 700,000 → NWC = 1,100,000.
AWC: With supplier finance, inventory turns improved → AWC ≈ $1,200,000.
ECL (After):
Step 1: 3,000,000 × 0.10 = 300,000.
Step 2: 300,000 × 0.45 = $135,000.
ECL_after = $135,000.
Debt service on $2,000,000 (7 y @ 8%):
Numerator = 0.08 × 2,000,000 = 160,000.
Annual payment = 160,000 ÷ 0.416302 ≈ $384,400 (rounded).
DSCR (After): 520,000 ÷ 384,400 = 520 ÷ 384.4 ≈ 1.353 → 1.35x.
Business unlocked: Expansion leads to $5,000,000 of additional facilities used over 2 years; origination fee on that incremental volume (0.5%) =
5,000,000 × 0.005 = $25,000.
—
Net impact (F&B)
ECL falls from $360k → $135k = $225k improvement.
DSCR moves from 0.28 → 1.35, enabling further lending and cross-sell.
Bank gains incremental facilities $5m and fee income ≈ $25k.
—
4) Equipment reseller (B2B dealer / inventory heavy)
Scenario: $4,000,000 overdraft to fund inventory; high obsolescence and stock risk. After: floorplan financing (inventory-backed, tranches on confirmed orders), reduced obsolescence, controlled stock turn → scale and exclusive dealer program.
Assumptions
Before EAD = $4,000,000.
After initial EAD = $3,000,000 (floorplan replaces overdraft), but client grows to $10,000,000 portfolio over time.
Before PD = 20% (0.20), LGD = 60% (0.60).
After PD = 8% (0.08), LGD = 40% (0.40).
Inventory obsolescence before = 50% chance → 50% write-down risk; after = 10%.
—
BEFORE
Facility: $4,000,000 overdraft. Inventory control poor.
Inventory write-down (realised stress example): 4,000,000 × 50% = 2,000,000 possible write-down. (This is a realized-loss example, not just expected).
ECL (Before):
Step 1: 4,000,000 × 0.20 = 800,000.
Step 2: 800,000 × 0.60 = $480,000.
ECL_before = $480,000.
NWC: Current assets 1,000,000; current liabilities 4,500,000 → NWC = 1,000,000 − 4,500,000 = −$3,500,000.
AWC: Reflects inventory at risk → AWC ≈ −$3,900,000.
—
AFTER (floorplan)
Facility: Floorplan revolving $3,000,000 (inventory financed by tranche on confirmed orders); tranche releases reduce risk; client gains dealer agreements.
Inventory obsolescence: 4,000,000 × 10% = 400,000 (vs 2,000,000 before). Benefit in expected write-downs = 1,600,000.
ECL (After):
Step 1: 3,000,000 × 0.08 = 240,000.
Step 2: 240,000 × 0.40 = $96,000.
ECL_after = $96,000.
Change in ECL: 480,000 − 96,000 = $384,000 reduction.
Business unlocked: Portfolio grows to $10,000,000 (floorplan finance). Incremental exposure $7,000,000. Bank origination & program fees (assume 0.5% on new volume) = 7,000,000 × 0.005 = $35,000.
—
Net impact (Equipment reseller)
Expected provisioning drops by $384k and huge reduction in actual inventory write-down risk (illustrative: realisable loss falls from $2.0m → $0.4m).
Business scales ( $3m → $10m floorplan ) with modest fee income.
—
5) SME Manufacturer (metal components, single large buyer)
Scenario: $6,000,000 WC tied to one large buyer (concentration). Buyer delays payment → stress. After: receivables purchase program ($4m) + LC-backed trade line ($2m), diversifying buyer risk; exports grow.
Assumptions
Before EAD = $6,000,000. After exposure (as growth) = $8,400,000 (40% growth).
Before PD = 25% (0.25), LGD = 60% (0.60).
After PD = 8% (0.08), LGD = 40% (0.40).
Receivables purchase program fees ~1% on volumes financed; LC fees 0.25%.
—
BEFORE
Facility: $6,000,000 general WC against concentrated receivable.
NWC: Current assets 2,500,000; current liabilities 6,500,000 → NWC = 2,500,000 − 6,500,000 = −$4,000,000.
ECL (Before):
Step 1: 6,000,000 × 0.25 = 1,500,000.
Step 2: 1,500,000 × 0.60 = $900,000.
ECL_before = $900,000.
—
AFTER (receivables purchase + LC)
Facilities: Receivables purchase (on diversified buyer base) $4,000,000 + LC trade line $2,000,000; exports expand 40% → total funding used ≈ $8,400,000.
ECL (After): (using EAD_after = 8,400,000)
Step 1: 8,400,000 × 0.08 = 672,000.
Step 2: 672,000 × 0.40 = $268,800.
ECL_after = $268,800.
Change in ECL: 900,000 − 268,800 = $631,200 reduction.
Fee & income: Receivables program fee 1% × 4,000,000 = $40,000; LC fee 0.25% × 2,000,000 = $5,000; total $45,000 upfront.
Business unlocked: Export orders ↑ 40%; bank finances larger book (from 6m → 8.4m) while ECL drops materially.
—
Net impact (Manufacturer)
Structuring reduces expected loss by ~$631k, while enabling 40% top-line growth and new fee income (~$45k). The bank converts concentration risk into diversified trade-finance revenue.
—
6) IT contractor (services SME with long receivables cycle)
Scenario: $2,000,000 WC loan to fund long receivables cycle; project delays cause missed payroll and contract loss. After: milestone-based financing aligned to client progress payments → client keeps contract and secures a $10m extension.
Assumptions
Before/after base EAD = $2,000,000. After growth: bank finances additional $8,000,000 for the contract extension.
Before PD = 18% (0.18), LGD = 60% (0.60).
After PD = 6% (0.06), LGD = 40% (0.40).
Origination fee on new large contract = 0.5%.
—
BEFORE
Facility: $2,000,000 general WC.
NWC: Current assets 500,000; current liabilities 2,800,000 → NWC = 500,000 − 2,800,000 = −$2,300,000.
ECL (Before):
Step 1: 2,000,000 × 0.18 = 360,000.
Step 2: 360,000 × 0.60 = $216,000.
ECL_before = $216,000.
Business outcome: Contract lost; no follow-on business.
—
AFTER (milestone financing)
Facility: $2,000,000 structured to pay per milestone; client keeps contract and wins $10,000,000 extension; bank will finance $8,000,000 of that extension.
ECL (After) on original exposure:
Step 1: 2,000,000 × 0.06 = 120,000.
Step 2: 120,000 × 0.40 = $48,000.
ECL_after (original) = $48,000.
Change in ECL (original): 216,000 − 48,000 = $168,000 reduction.
Business unlocked: Bank finances additional $8,000,000. Origination fee = 0.5% × 8,000,000 =
8,000,000 × 0.005 = $40,000.
—
Net impact (IT contractor)
ECL for the original loan falls by $168k; bank wins an $8m financing opportunity (fee $40k) and gains longer, higher-quality relationship.
—
Consolidated quick view (key deltas)
Real estate: ECL −$3,200,000; follow-on +$30m; fee +$150k.
Trader: ECL −$258,000; turnover +$6m; fees ≈ +$30.8k.
F&B: ECL −$225,000; extra facilities +$5m; fees +$25k.
Equipment reseller: ECL −$384,000; obsolescence expected loss reduced by $1.6m (illustrative); portfolio growth to $10m; fees +$35k.
Manufacturer: ECL −$631,200; exposure ↑ to $8.4m; fees +$45k.
IT contractor: ECL −$168,000; financing unlocked +$8m; fees +$40k.
(These are illustrative, arithmetic-explicit cases you can drop straight into a workbook or a slide.)
—
Short playbook for trainers running the exercises
1. Present the Before facts and ask each group to compute NWC, AWC, ECL and identify the immediate problems.
2. Give them the After structure outline (as above) and ask them to recompute — force them to show the digit-by-digit math (EAD × PD × LGD).
3. Ask each group to list how the structure unlocked business (cross-sell, follow-on financing, fees) and quantify the incremental wallet & fees.
4. Debrief with the key message: good structuring often increases exposure but lowers expected loss and creates fee/growth opportunities — show the numbers.
—
Next steps:
convert the six cases above into reusable Excel templates (one worksheet per case) with input cells for PD/LGD, interest rates, amortizations, and automatic ECL / DSCR / NWC/AWC calculations, or
produce a participant case pack (Word/PDF) with the “Before” fact sheet, three alternative “After” structuring options and a facilitator’s answer sheet (with the numbers above).
