cial banking customers have increased
over the last three-to-four years. Savage
indicated that some banks have a
group separate from ABL that monitors
borrowing-base certificates and manages the field-exam process for these
commercial bank customers. Savage
also indicated that, in those banks that
monitor commercial bank customers’
borrowing-base certificates through the
relationship manager, field exams are
generally performed on initial fundings,
line increases or material covenant
changes. Savage further indicated that
the field exam may the one easy time
that a commercial lender has the chance
to see the books and records from its
perspective.
Michael Lederman, vice president,
Bridge Bank, Technology Banking Group,
began his banking career in asset-based
lending, where field exams have always
been very common and are usually
required as often as quarterly. Because
he now concentrates on traditional
banking products for venture-backed
technology companies, Lederman may
require field exams less frequently. However, as financial or collateral performance deteriorates, Bridge may require
of the borrower’s collateral, systems and
reporting. At one time the field-examination reports were handwritten or typed
and the workpapers were calculated and
maintained on accounting paper. Now,
some of the field-examination programs
are very sophisticated, detailed and
extensive, including up to 50 worksheet
tabs. Certain field-examination programs automatically incorporate work-paper tables into the report pages and
all the examiner has to do is comment
on the results.
Also, it seems unanimous that the
field-examiner position has had a significant professional elevation. Virtually
all professionals entering the field are
either accounting or finance majors or
have accounting or finance experience.
Further, as evident in our firm, many
examiners are either CPAs or have MBAs,
and their compensation matches that of
other professionals in the banking and
accounting industry. Also, the experience that a field examiner gains is very
valuable and portable to the banking,
accounting and commercial industries.
Where the lenders historically relied
on internal examiners, one- or two-man
shops and/or accounting firms, there
which were once cash-flow borrowers,
are moving to secured-financing facilities that require field examinations. TSL
Steven M. Rosenberg, CPA, is the managing
partner of Rosenberg and Fecci Consulting
LLC, which provides field examination and
other consulting services. He has worked
in the asset-based lending industry since
1993 and is a licensed CPA in New Jersey
and New York. Mr. Rosenberg is a member
of the AICPA, NYSSCPA, NJSCPA,
Accountants Club of America and CFA
Education Foundation. Steve was the former
chairman of the “Cooperation with Bankers
and Other Credit Grantors” committee of the
NYSSCPA.
ALSO, It SEEMS uNANIMOuS tHAt tHE FIELd-ExAMINER POSItION HAS HAd
A SIGNIFICANt PROFESSIONAL ELEvAtION. vIRtuALLY ALL PROFESSIONALS
ENtERING tHE FIELd ARE EItHER ACCOuNtING OR FINANCE MAJORS OR
HAvE ACCOuNtING OR FINANCE ExPERIENCE.
field exams more frequently. Bridge
has a high reliance on field exams done
by experienced and trusted firms. The
field exam is an integral part of Bridge’s
underwriting and is highly valued by its
credit committee.
Based on my experience and the
experience of several professionals in
the field-examination industry, many
aspects of the business have changed
for the better. It seems that the field
examination itself has gone from very
limited procedures on accounts receivable to full-blown testing and analysis
are now many firms across the country
whose goal is to provide quality field
examinations to lenders. These have
flourished as a result of the increased
emphasis on the field examinations
lenders now require. New firms are continually entering the industry.
Historically, only finance companies
used field examinations. Currently small,
medium and large factors, asset-based
lenders, commercial banks, investment
banks and hedge funds are using field
examinations. In this economy, even
large public (well-known) companies,
