ARG TRANSACTION SERVICES
Field Exam and Due Diligence Services
Transaction services provides all levels of due diligence and borrower training through field examination and other due diligence services. ARG Transaction Services customizes scope of work based on client criteria for
all industries. Please see Industries Served for a comprehensive listing of industry experience.
ARG Transaction Services only uses senior and experienced personnel for field examination services. ARG Transaction Services has associates coast to coast to provide timely and efficient field examinations. ARG Transaction Services also has expertise in specialty industries such as high-volume consumer and corporate paper and lender finance transactions including factoring and working capital lenders.
Standard Scope
ARG Transaction Services formulates the scope of work with lenders/stakeholders for every examination. Standard scope working capital examinations, whether for prospects or portfolio companies, include:
• Accounts receivable analysis for collateral roll-forward, turnover, gross and net dilution, credit memo analysis, collateral and cash reconciliation, revenue recognition,
ineligibles, past dues, concentrations, aging trends and other services such as verifications and subsequent cash receipt analysis.
• Inventory analysis for turnover, slow-moving, ineligibles, reconciliation, cost testing, test counts, gross margin testing, inventory mix and transfer pricing if applicable.
• Accounts payable reconciliation, vendor concentrations, turnover, past due payables and other testing as necessary.
• General ledger review, bank statement reconciliation, payroll and other tax payment review and other necessary analysis.
Specialty Scope
ARG Transaction Services also has expertise in specialty industries:
• Static Pool advisory and implementation for high volume consumer or corporate paper backed financing.
• Portfolio analysis services – grading of loans, collateral and credit administration for evaluation by clients for purchase, sale or for oversight requirements.
• Lender finance scope examinations, credit policy and adherence to credit policy analysis, credit grading and decisioning analysis and borrowing base formula review.
Enhanced Scope
Enhanced scope field examinations are either Standard or Specialty Scope; however, the lender or stakeholder has specific items that they want ARG Transaction Services to focus.
• Borrower’s performance is trending negative and lender is proactively engaging ARG Transaction Services in order to determine if borrower has a plan to correct
negative trends and/or
• Lender believes that borrower has or is about to break financial covenants, and wants ARG Transaction Services to gather specific information to help lender formulate
a plan to deal with the borrower’s forthcoming liquidity issues.
• ARG Transaction Services enhanced field examination often precludes the engagement of ARG Partners and the development of a comprehensive cash flow model.
Time to complete a comprehensive cash flow model is greatly reduced when there is a fresh field examination available and especially if ARG Transaction Services
completed such examination.
All exams include an Executive Report and accompanying workpapers to allow clients to quickly assess examination results and address material issues timely.
An ARG Transaction Services field examination helps lenders and stakeholders minimize their exposure to troubled borrowers. Often times, early detection of critical liquidity issues aids lenders and stakeholders to manage toward better outcomes. An ARG Transaction Services enhanced field examination provides for the early identification of forthcoming liquidity troubles and allows for the advantage of time to more successfully manage collateral risk.
ARG Partners advisory services are materially more effective if a negatively trending company’s performance is addressed early and before there is working capital deterioration. The cost and benefit of early detection often determines whether a borrower survives a liquidity crisis and if the lender/stakeholder’s positions are covered in the event there is a liquidation.
