Different shops approach the roles in different
ways but comprise the same three elements: business
development, underwriting and portfolio management.
The business development officer (BDO) identifies the
opportunity, the underwriter researches and assesses
the risk and the portfolio manager oversees the account.
MB Business Capital and PNC Business Credit keep
these roles distinct, but BMO Harris Bank combines its
underwriting and portfolio management responsibilities.
“Our portfolio managers underwrite the deals that
they subsequently manage,” explains Jason Hoefler,
managing director of Asset Based Lending at BMO
Harris Bank. “The underwriter examines how the
company operates, reviews its financial performance
and assesses projections and collateral with the > >
Today’s underwriters perform a similar service by
thoroughly examining the lending risk associated with
a particular company and presenting that information
to a credit committee that approves or disapproves the
transaction. We sat down with three ABL underwriting
executives who explained the nature of their work, how
it’s important and why they enjoy it.
A Peek Behind the Curtain:
ABL Underwriters — Evaluating Risk
to Seal the Deal
BY LISA A. MILLER
Since the days when tall ships carried cargo across dangerous seas, underwriters
have assessed the risks involved before signing off on financial transactions. While the
nature of the risks may have changed, under writers still conduct thorough due diligence
to evaluate a company’s stability and the state of the collateral before deals are closed.
ABF Journal contributor Lisa Miller speaks with three under writers to learn exactly how
they make those evaluations and which signs point to a successful outcome.