The Collateral Review is an interrogation of a company’s accounting records, testing, verifying and validating the information so as to ascertain the key issues that a lender would need to consider when structuring their facility.
At Lambert Smith Hampton we have a team of specialists who have been providing this service for the Asset Based Lenders for many years now. Conducting both pre–lend and cycle Collateral Reviews in the UK and across Europe.
Within a Collateral Review of the Receivables we would comment upon the quality of the customer base, historical trends in respect of dilution, age of the Receivable and payment history. A full systems review would comment upon the quality of the documentation validating the Receivable, testing the Proof of Delivery and suggesting improvements that should be made to support an Invoice Finance facility.
For a Collateral Review of the Inventory we review the accounting records and systems associated with all elements of the Inventory, Raw Materials, WIP and Finished Goods. Tests are undertaken to confirm the true cost, gross margin and that all important test count identifying if the Inventory is there.