Field Examinations: A Critical Tool for Risk Management in Lending

In today’s complex lending environment, financial institutions face increasing challenges in assessing and managing risk. As banks extend credit facilities to energy traders, commodity businesses, and other asset-heavy industries, ensuring the accuracy and reliability of collateral valuations is more important than ever.

At R&F, we specialize in collateral field examinations, providing banks and financial institutions with the critical insights needed to mitigate risk and make informed lending decisions.

Why Collateral Field Examinations Matter

For banks engaged in asset-based lending (ABL), understanding the true value of collateral is essential. Market volatility, pricing differentials, and complex financial instruments can all impact the underlying value of assets securing a loan. Without a thorough examination, banks may be exposed to hidden risks that could affect their loan performance.

Commodity-backed loans, in particular, require a specialized approach due to:

✔ Rapidly changing market conditions that affect valuation

✔ Physical and financial asset interplay in trading environments

✔ Storage and transportation risks that can alter asset accessibility

✔ Hedging and derivatives exposure affecting liquidity and loan structures

Our Expertise: Beyond the Basics

R&F brings deep expertise in commodity-based collateral exams, conducting field examinations across:

🔹 Large & Small Energy Traders – Assessing inventory, financial instruments, and market exposure to energy price swings

🔹 Ferrous & Non-Ferrous Metals – Evaluating storage conditions, quality control, and real-time pricing in global markets

🔹 Agricultural Commodities – Including grains, legumes, sugar, coffee, and chocolate, where factors like seasonality, spoilage risk, and market fluctuations play a crucial role

🔹 Plastics & Steel – Quasi-commodities requiring custom valuation models and an understanding of industry trends

🔹 Forward & Future Contracts – Evaluating derivative exposure and its impact on collateral valuation

Commodity-based lending requires a higher level of scrutiny due to the fluctuating nature of these assets. Our specialized approach ensures that banks have the most accurate, real-time assessments to support sound lending decisions.

Unlike standard collateral audits, our examinations go deeper by considering:

✔ Market & Differential Pricing Analysis – Understanding how market fluctuations impact asset value

✔ Forward & Future Contracts Evaluation – Assessing how derivatives influence reported collateral

✔ Offset Adjustments & Collateral Impact – Identifying potential risks and ensuring accurate loan structuring

The R&F Advantage

With over 29 years of experience in the field examination industry, R&F has a proven track record of handling high-value collateral across multiple industries. Our team delivers reliable, data-driven assessments that empower banks to make sound lending decisions. We don’t just validate collateral—we provide actionable insights to help financial institutions manage exposure, mitigate risk, and optimize lending structures.

As banks navigate an increasingly volatile financial landscape, having a trusted partner with decades of expertise in collateral field examinations is key to reducing risk and ensuring financial stability. Let’s Connect!

📩 Reach out to us today to learn more.

https://www.rosenbergandfecci.com/contact

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