1. (6 points) Borrowing Base Certificate Example. Complete the missing information in the table below, including the excess or shortfall as of the date of the report.

Asset	Balance	Advance Rate	Eligible Collateral
Accounts Receivable	$3,600,000	80%
Inventory	$4,400,000	60%
Equipment	$1,250,000	50%
Total Borrowing Base
Line of Credit Maximum			$7,000,000
Max Borrowing Today
Line of Credit Balance (current outstanding)			$6,200,000
Available / (excess)

2. (5 points) A golf course has requested a revolving line of credit for seasonal working capital needs and new pro shop inventory. The course is privately owned by its members, with none owning more than 5% of the course. Provide specific comments on the following loan structure components for this request.

Loan interest rate (fixed or variable)?
Loan maturity (term)
Collateral
Payment structure (amt / frequency)
Financial monitoring requirement

3. (7 points) A privately-held medical provider has requested financing for the purchase of equipment with a cost of $4,000,000 related to an expansion to its current facility. The equipment is expected to have a useful life of 15 years. The company is owned equally by four physicians. Provide specific comments on the following loan structure components for this request.

Loan amount (actual $, based on your chosen advance rate)
Loan interest rate (fixed or variable)?
Loan maturity (term)
Amortization (months or years)
Payment structure (payment frequency)
Personal guarantees
List one covenant you might suggest for this loan request

4. (6 points) Using the tax return screen shot below, and assuming all principal and interest payments totaled $61,000 per month, calculate the debt service coverage ratio (DSCR) for the company below.

6,510,000 1c 2 6,510,000 3,680,000 2,830,000 Income 3 4 2,830,000 1,300,000 1a Gross receipts or sales. 1a b Returns and allowances 1b c Balance. Subtract line 1b from line 1a. 2 Cost of goods sold (attach Form 1125-A) 3 Gross profit. Subtract line 2 from line 1c . 4 Ordinary income (loss) from other partnerships, estates, and trusts (attach statement) 5 Net farm profit (loss) (attach Schedule F (Form 1040)) 6 Net gain (loss) from Form 4797, Part II, line 17 (attach Form 4797) 7 Other income (loss) (attach statement) 8 Total income (loss). Combine lines 3 through 7 Emphasis 9 Salaries and wages (other than to partners) (less employment credits) 10 Guaranteed payments to partners 11 Repairs and maintenance. 12 Bad debts. 13 14 Taxes and licenses 15 Interest (see instructions) 16a Depreciation (if required, attach Form 4562). 16a b Less depreciation reported on Form 1125-A and elsewhere on return 16b 17 Depletion (Do not deduct oil and gas depletion.) 18 Retirement plans, etc. . 19 Employee benefit programs 20 Other deductions (attach statement) 21 Total deductions. Add the amounts shown in the far right column for lines 9 through 20 22 Ordinary business income (loss). Subtract line 21 from line 8 5 6 7 8 9 10 11 12 13 14 15 Rent 110,000 205,000 Deductions (see instructions for limitations) 319,000 16c 17 18 19 20 21 22 72,000 356,000 2,362,000 468,000 6,510,000 1c 2 6,510,000 3,680,000 2,830,000 Income 3 4 2,830,000 1,300,000 1a Gross receipts or sales. 1a b Returns and allowances 1b c Balance. Subtract line 1b from line 1a. 2 Cost of goods sold (attach Form 1125-A) 3 Gross profit. Subtract line 2 from line 1c . 4 Ordinary income (loss) from other partnerships, estates, and trusts (attach statement) 5 Net farm profit (loss) (attach Schedule F (Form 1040)) 6 Net gain (loss) from Form 4797, Part II, line 17 (attach Form 4797) 7 Other income (loss) (attach statement) 8 Total income (loss). Combine lines 3 through 7 Emphasis 9 Salaries and wages (other than to partners) (less employment credits) 10 Guaranteed payments to partners 11 Repairs and maintenance. 12 Bad debts. 13 14 Taxes and licenses 15 Interest (see instructions) 16a Depreciation (if required, attach Form 4562). 16a b Less depreciation reported on Form 1125-A and elsewhere on return 16b 17 Depletion (Do not deduct oil and gas depletion.) 18 Retirement plans, etc. . 19 Employee benefit programs 20 Other deductions (attach statement) 21 Total deductions. Add the amounts shown in the far right column for lines 9 through 20 22 Ordinary business income (loss). Subtract line 21 from line 8 5 6 7 8 9 10 11 12 13 14 15 Rent 110,000 205,000 Deductions (see instructions for limitations) 319,000 16c 17 18 19 20 21 22 72,000 356,000 2,362,000 468,000