Due Diligence Template

Description
Due Diligence report for potential partnership with Kiva.

Provides:
-> Overview & Highlights of the company in question
-> Social Performance
-> Risks
-> Products and Services
-> Financial Performance
-> Financial Projections

Due diligence is a really important process when it comes to loan because it helps the lender to make an informed decision as to whether they should go through with the loan to the borrower, and if they do, based on what terms. A complete due diligence review of the party borrowing the money helps to make sure that lending this party money won't entail legal risks that the lender isn't aware of that may lessen the chances of getting repaid.

Due Diligence is good for finding out aspects of the borrower's company that can either:
Negotiate new pricing terms of the loan.

Result in changes to:
The collateral package that will secure the loan or other support on credit for the obligations of repayment, i.e. insurance or guarantees.

Result in the lender withdrawing from the deal.
Lack of awareness of significant legal risk in a lending deal may cause problems for a lender, that can range from a business transaction being unfavorable to legal liability and ending up being forced to pay damages.

The extent of a due diligence process is determined by:
-> The kind of transaction
-> Who is involved
-> The level of risk involved

The correct questions must be asked and the proper steps must be followed to carry out an investigation that is thorough and detailed enough to obtain a sufficient overview of the borrowing company. Typically, a due diligence process will involve a large range and number of documents that must be exchanged and reviewed in detail. This usually requires a team of attorneys, a good process structure, and fine organizational skills.

The concerns of due diligence will vary depending on the nature of the borrower's business and the type of transaction.