The Purpose of Collateral Field Examinations

As the founder and managing partner of CoMetrics Partners, LLC, Gary D. Herwitz specializes in helping middle-market companies develop growth strategies and maximize efficiencies. Gary Herwitz and the team at CoMetrics Partners, LLC, also offer a wide range of additional services, including ongoing collateral field examinations as part of the company’s lender advisory division.

A collateral field examination is an assessment and written report on a borrower’s collateral. The report largely focuses on inventory, accounts receivable, and internal processes. Through the collateral examination process, companies are able to report accurate data to their lenders, and asset-based lenders and banks use the assessments to ensure that authentic and sufficient collateral exists to support a loan. The examination also helps lenders better understand the collateral characteristics and identify risk that could be related to the assets.

By conducting collateral field examinations, a company confirms that its accounting systems and internal controls can facilitate accurate reporting and reflect changes. The examination also serves to inform lenders who use collateral examinations to formulate sound credit decisions.