Credit MemoIllustrative example
Methodology: Workspace financial extraction · ratio and trend analysis · credit screen · professional memo pipeline
Acme Manufacturing — Underwriting Package
A decision-ready credit draft built from the spread, source evidence, policy tests, and surfaced exceptions.
Credit recommendationRisk rating & key risksCovenants & conditionsCited DOCX memo
CREDIT UNDERWRITING PACKAGE
Borrower: Acme Manufacturing, Inc. ("Acme" or "the Company")
Facility: $2.0M Revolving Line of Credit, maturing Jan 2029
Purpose: Working capital support for seasonal inventory build
RECOMMENDATION: APPROVE with conditions
FINANCIAL VIEW
• Adjusted DSCR: 1.42× (Policy minimum: 1.25×) [1]
• Leverage (Total Debt / EBITDA): 2.8× (Policy max: 3.5×) [2]
• Current Ratio: 1.3× [3]
• Customer Concentration: Top 3 customers = 42% of revenue [4]
RISKS, EXCEPTIONS & STRUCTURE
1. Customer concentration exceeds 30% threshold (actual: 42%) — Mitigated by 5-year contract renewals with top 2 customers [4]
2. Covenant headroom on fixed charge coverage: 0.15× below internal target — Offset by strong liquidity position ($1.2M unrestricted cash) [5]
3. Proposed conditions: monthly borrowing-base certificate; minimum DSCR 1.25×; maximum leverage 3.50×.
SOURCES & CITATIONS
[1] DSCR calculation: Normalized EBITDA $1.85M / Debt Service $1.30M = 1.42×. Source: FY2025 audited financials p.12-14, LTM adjustments per bank statements pp.28-31.
[2] Total debt $5.2M per balance sheet p.8. Adj. EBITDA $1.85M per income statement p.11.
[3] Current assets $4.1M / Current liabilities $3.2M per balance sheet p.8.
[4] Customer concentration: Customer A 18%, Customer B 14%, Customer C 10% per AR aging p.22. Contract terms verified in agreements pp.45-52.
[5] Cash position per bank confirmation pp.33-34.
