Case Study

Commercial Loan Underwriting Training for the U.S. Department of Agriculture’s Rural Development

Challenge: The U.S. of Department of Agriculture’s Rural Development (RD) offers loans, grants, and loan guarantees to help create jobs and support economic development and essential services such as housing; healthcare; first responder services and equipment; and water, electric, and communications infrastructure. RD promotes economic development by supporting loans to businesses through banks, credit unions, and community-managed lending pools. They offer technical assistance and information to help agricultural producers and cooperatives get started and improve the effectiveness of their operations. Commercial and community projects directly financed or guaranteed by RD have become larger and more complex in recent years, and RD needed a common underwriting template and training program to provide loan specialists with the fundamentals of commercial underwriting and ensure consistent underwriting standards across RD.

Solution: Summit developed a nationwide commercial loan training series and underwriting template to train RD’s loan specialists on all elements of financial statements, qualitative and quantitative analysis to reveal drivers of risk, the role of credit enhancements, and stress testing and sensitivity analysis on borrower forecasts. Summit’s training included developing a curriculum, pre-training materials, course materials, and post-training materials to measure the retention of information at least 2 months after course completion. Course completion resulted in certification.

Results: This training effort was the most significant nationwide commercial underwriting training undertaken by RD in 20 years. Four hundred RD underwriters from around the country were included, and the training was offered in eight cities. Class sizes were limited to 25 attendees per session, enabling a close connection with the instructor and ample time for questions and answers. Each attendee received a training binder to keep and use for reference; electronic copies of the training and a live recording were also available. The training began with an initial assessment to gauge existing levels of experience and concluded with a knowledge test and course evaluation on the last day of training. A knowledge post-test several weeks after the training assessed the amount of information retained.