Lease Credit Course

Lesson 1 • Parties and Stakeholders

Identifies every party in a lease credit transaction and their interests. Understanding stakeholder roles is essential for structuring and underwriting decisions.

Lesson 2 • Regulatory and Accounting Context

Introduces the accounting standards and regulatory principles governing lease reporting. Students learn how compliance shapes credit decisions and documentation.

Lesson 3 • What Is Lease Credit

Defines lease credit and its role in asset financing. Connects the concept to broader credit markets so students understand its commercial purpose.

Lesson 1 • Defining Credit Risk in Leasing

Explains default risk, concentration risk, and residual risk unique to leases. Grounds students in the specific risk dimensions that drive underwriting criteria.

Lesson 2 • Asset and Collateral Risk

Examines how asset type, age, and market liquidity affect collateral value. Students learn to assess residual risk as a distinct credit exposure.

Lesson 3 • Lessee Financial Profile Analysis

Covers how to read and interpret a lessee's financial statements for credit purposes. Students connect financial ratios directly to lease payment capacity.

Lesson 4 • The Five Cs Applied to Leases

Adapts the classic five-Cs framework to lease credit contexts. Students practise mapping each dimension to lease-specific data sources and indicators.

Lesson 1 • Industry and Peer Benchmarking

Explains how to compare a lessee's financials against industry norms and peers. Benchmarking contextualises ratios and flags outliers that warrant deeper review.

Lesson 2 • Liquidity and Solvency Ratios

Covers current ratio, quick ratio, debt-to-equity, and related metrics. Students interpret these ratios in the context of lease payment obligations.

Lesson 3 • Spreading Financial Statements

Teaches the process of normalising and spreading multi-year financials into a standard format. Consistent spreading enables valid comparisons across applicants and periods.

Lesson 4 • Cash Flow Analysis

Focuses on free cash flow, operating cash flow, and debt service coverage. Students learn to distinguish accounting profit from actual payment capacity.

Lesson 1 • Lease Structuring for Credit Fit

Shows how to adjust lease terms to align risk with acceptable credit parameters. Structuring tools include advance payments, guarantees, and term modifications.

Lesson 2 • Application Intake and Screening

Covers the initial review of a lease application for completeness and eligibility. Early screening prevents wasted effort on ineligible or incomplete submissions.

Lesson 3 • Underwriting Analysis and Decision

Synthesises financial, collateral, and credit data into a structured credit decision. Students practise applying approval criteria and documenting their rationale.

Lesson 4 • Documentation and Compliance Review

Ensures all credit decisions are supported by complete, compliant documentation. Students learn the documentation standards required before funding any lease.

Lesson 1 • Building a Lease Pricing Model

Walks through constructing a spreadsheet-based lease pricing model step by step. Students produce a functional model that calculates payment, yield, and return metrics.

Lesson 2 • Lease Pricing Fundamentals

Introduces the components of lease pricing: cost of funds, credit spread, and fees. Students understand how each element contributes to the total lease rate.

Lesson 3 • Residual Value Setting

Covers methods for estimating and setting residual values in lease pricing. Accurate residuals are critical to profitability and risk management.

Lesson 4 • Profitability and Return Metrics

Defines return on assets, economic profit, and risk-adjusted return for lease deals. Students evaluate whether a deal meets portfolio return thresholds.

Lesson 1 • Portfolio Stress Testing

Applies macroeconomic and sector-specific stress scenarios to a lease portfolio. Students quantify potential losses and assess capital adequacy under adverse conditions.

Lesson 2 • Delinquency Management

Explains the stages of delinquency and the corresponding collection and workout actions. Students learn to escalate appropriately while preserving lessee relationships.

Lesson 3 • Allowance and Reserve Calculations

Introduces methods for calculating credit loss allowances and reserves in a lease portfolio. Accurate reserves protect financial stability and satisfy regulatory expectations.

Lesson 4 • Ongoing Lessee Monitoring

Details the triggers and processes for reviewing lessee financial health post-origination. Proactive monitoring reduces loss severity by enabling early intervention.

Lesson 1 • Asset Disposition and Loss Mitigation

Covers strategies for selling or re-leasing repossessed assets to maximise recovery. Students evaluate disposition channels and calculate net recovery amounts.

Lesson 2 • Workout Strategy Development

Guides students through designing a workout plan tailored to the lessee's situation. Effective workouts balance recovery maximisation with lessee viability.

Lesson 3 • Identifying Distressed Accounts

Covers the financial and behavioural signals that indicate a lessee is in distress. Early identification expands the range of available workout options.

Lesson 4 • Deficiency and Legal Remedies

Addresses deficiency balances and the legal remedies available after asset disposition. Students understand when litigation or settlement is the optimal recovery path.

Lesson 1 • Designing a Lease Credit Policy

Walks through the components of a comprehensive lease credit policy document. A well-designed policy aligns underwriting behaviour with organisational risk appetite.

Lesson 2 • Strategic Portfolio Optimisation

Applies portfolio theory to optimise the risk-return profile of a lease credit book. Students use data to make strategic origination, retention, and exit decisions.

Lesson 3 • Risk Appetite and Concentration Limits

Explains how to define and operationalise risk appetite for a lease credit portfolio. Concentration limits prevent overexposure to any single risk dimension.

Lesson 4 • Credit Committee Governance

Covers the structure, authority, and operating procedures of a lease credit committee. Effective governance ensures consistent, accountable credit decision-making.