Mechanics Of Global Cash Flow and DSCR For Small Regional Commercial Loans

[Bryan Hancock]

I was wondering if someone that actually works behind the scenes as an underwriter at a small regional could walk members of the board through how they calculate "global cash flow" and DSCR for borrowers seeking a commercial loan. Common items small regionals request are:

-3 years of tax returns
-PFS
-Personal information
-Contingent liabilities
-Check boxes making sure you're not a scumbag or have weaseled out of debt

Are these the items needed for a brass tacks underwriting of global cash flow and DSCR for a lender's perspective? If so, can someone please provide a synopsis for the actual process for underwriting, what assumptions are generally made, and how the values are calculated? In other words, are the tax return numbers averaged? If so, which values? What is ignored on a PFS? What income is used and modified to generate global cash flow? Things of this nature.

If anyone can recommend good literature on this it is appreciated too.