Loan Loss Reserve Estimator
A loan loss reserve you can explain to your auditor, loan by loan
Install it in one line — paste a single command into Claude, ChatGPT or Cursor and it writes the skill into your project.
Free, and about thirty seconds: a work email and a six-digit code.
Downloading shares your name, firm, role, and email with The Helvetica Group. That introduction is what keeps every skill here free.
What this skill does
Estimates how much to set aside for expected losses on your loan book, in a way you can defend to an auditor or investor. Grades every loan, works out the shortfall on troubled loans from a current property value less the cost of selling it, and sets a reserve for the performing loans from your own loss history.
What it does
- Asks first how your books are kept — with a reserve, or at fair value as many funds do — since that changes what the result is
- Grades every loan on a standard scale and records the reason for any loan on watch or worse
- Calculates the shortfall on each troubled loan: current value, minus selling costs and senior liens, against what is owed
- Builds a reserve for performing loans from your historical losses, with written-down adjustments for market conditions
- Rolls the reserve forward from last period, explains the change, and shows what happens if values fall further
When to use it
- Closing a quarter or year
- Your auditor or CPA asks for a reserve methodology
- Several loans have gone into default and you need to size the exposure
- Preparing investor reporting on the health of the book
What to have ready
- Your loan tape as of period end
- How your entity reports its loans, if you know
- Current values on any delinquent or defaulted loans
- Your history of losses and recoveries
How to use it
- Download it with the button above. You'll sign in with a work email — that's how the creator knows who is using their skill.
- Copy the install prompt from the "Run it in Claude" box, and paste it into Claude along with the file. Claude installs the skill, fills in your firm's details where the file has
[BRACKETED]placeholders, and runs a quick test with you. - Then just ask in plain English. Claude picks the skill up on its own when a request matches it. Anything it still needs, it asks you for — it won't invent a number.
"Here's our loan tape as of [DATE] and broker opinions on the [NUMBER] loans in default. Estimate our loan loss reserve for the quarter and list what our CPA needs to decide."
What you get back
A reserve estimate for CPA review: grade distribution, loan-by-loan shortfalls on troubled loans, the pooled reserve with its adjustments, a roll-forward, sensitivities and a list of questions for your accountant.
Good to know
- Output quality tracks input quality. A missing figure is flagged as missing — it is never estimated to fill a gap.
- Every draft is a starting point for your own review, not a finished decision.
- Runs anywhere Claude does: the Claude app, Claude Desktop, or Claude Code.
- Explains the current expected credit loss standard (CECL) in plain terms, but the accounting treatment is always confirmed by your CPA. Never invents a loss rate — it uses your history or proxies you supply.
Legal disclaimer
This skill drafts; it does not decide. Its output is not legal, tax, accounting, appraisal, or investment advice, and using it creates no attorney-client, fiduciary, or advisory relationship. Nothing it produces is a commitment to lend or an offer to sell a security. Verify every number, date, citation, and conclusion against the source documents, and have a qualified professional licensed in the relevant jurisdiction review the work before you rely on it or send it to a borrower, investor, counterparty, or regulator. Laws, rates, and market data change. The final work product is yours.
Inside this skill
The actual file you get. Members can read it in full before saving it.
Loan Loss Reserve Estimator
Private lenders tend to reserve in one of two bad ways: nothing until a loan is lost, or a round percentage nobody can explain to an auditor. Both break down at the same moment — when a few loans go bad at once and investors ask what the book is really worth. This skill builds a reserve that can be defended: a documented grade for every loan, a specific shortfall on each impaired loan calculated from a dated value, and a pooled reserve for the rest grounded in the lender's own loss history.
Works for balance-sheet lenders and debt funds holding bridge, fix-and-flip, construction, land, DSCR and small-balance commercial loans.
Estimate for review. The accounting framework, methodology and final reserve are the responsibility of management and its CPA or auditor. This skill prepares the analysis and the questions; it does not decide the accounting.
Step 1 — Intake
| Input | Required? | Notes |
|---|---|---|
| Loan tape as of period end | ✅ | Loan ID, loan type, balance, accrued interest receivable, advances, rate, maturity, status, LTV, value and value date, undisbursed holdback |
| Accounting framework | ✅ | How the entity reports: loans at amortized cost with an allowance, or at fair value (common for funds reporting as investment companies). Ask; do not assume |
| Current risk ratings | Helpful | If none, Step 3 assigns them with the default scale below |
| Troubled-loan detail | ✅ for impaired loans | Current as-is value (date, source), senior liens and delinquent taxes, expected costs to sell, status of enforcement |
| Historical losses | ✅ for the pooled reserve | By year and loan type: charge-offs, recoveries, average balance. Ideally several years across a cycle |
| Prior-period reserve | Helpful | For the roll-forward and to explain changes |
| Qualitative factors | Helpful | Market value trends, underwriting changes, concentrations, staffing — the user's view |
| Accounting policies | Helpful | Nonaccrual trigger, charge-off policy, whether accrued interest is reserved or reversed |
Minimum viable: the loan tape, the accounting framework, and dated values on any loan that is delinquent 60+ days, matured unpaid, or in enforcement. Without loss history, the pooled reserve is shown as a range from the user's proxy assumptions and marked "no supporting history."
Reading the full skill counts as a download. The contributor receives your name, company, and email.
Ratings & reviews
No written reviews yet. If you run this on a live file, say how it went. The next lender reading this page is deciding whether to trust it.
Examination record
Run it in Claude
- Copy the install command above
- Paste it into Claude, ChatGPT or Cursor
- It writes the skill in, fills in your firm’s details, and test-runs it with you
Prefer the file? The prompt above is for a package you already downloaded.
Details
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