Lender Advisory Services?
I have an interview coming up this week with a consulting firm for a role in a group that works primarily with lenders and financial institutions, providing services around things like collateral analysis/assessment, evaluating borrowers and their financial performance, and supporting lenders in assessing credit risk and lending capacity.
Curious if anyone here works in a similar group and could shed some light on what the work is actually like.
I’m coming from Big 4 and would especially like to understand:
* What does the day-to-day work actually look like?
* How much of the work is collateral/field-exam focused vs. financial/credit analysis?
* What types of engagements do you typically work on?
* How much interaction do you have with lenders, sponsors, and management?
* What are the hours and travel like?
* How repetitive vs. analytical/varied is the work?
* What should someone coming from Big 4 be prepared for in the interview?
Would appreciate any insight from people in this type of practice or something comparable. Feel free to DM if you’d rather not post publicly.
Based on the most helpful WSO content, here’s what you need to know about lender advisory services and what to expect:
Day-to-Day Work:
The work typically involves a mix of collateral analysis, financial performance evaluation, and credit risk assessment. You’ll likely spend time analyzing borrowers' financials, assessing their ability to meet debt obligations, and evaluating collateral to determine lending capacity. Writing detailed credit memos and presenting findings to lenders or investment committees may also be part of the role.
Collateral vs. Financial/Credit Analysis:
The balance between collateral-focused work and financial/credit analysis can vary depending on the firm and the specific engagement. Asset-based lending (ABL) engagements, for example, are heavily collateral-driven, while other projects may lean more towards traditional financial and credit risk analysis.
Types of Engagements:
Common engagements include:
Interaction with Stakeholders:
You’ll likely interact with lenders, sponsors, and sometimes the management of borrower companies. This could involve attending management meetings, discussing findings with lenders, and presenting recommendations.
Hours and Travel:
Hours can vary but may be demanding, especially during tight deadlines or field exams. Travel is often required, particularly for on-site collateral assessments or management meetings, though the extent depends on the firm and client base.
Repetitive vs. Analytical Work:
The work can be a mix. Collateral analysis and field exams may feel repetitive at times, but financial and credit analysis often require deeper analytical thinking and problem-solving, especially when evaluating complex borrower situations or structuring deals.
Interview Preparation for Big 4 Candidates:
Coming from a Big 4 background, you should:
Good luck with your interview! If you need more specifics, feel free to ask.
Sources: Overview of Leveraged Finance, Credit Analyst Q&A, Credit Analyst Q&A, Distressed Debt Hedge Fund out of College - Prep Advice
The description in your first paragraph sounds very much like a field exam role for ABL transactions. I had a role like this earlier in my career. The financial/credit analysis was very limited, in most cases the lender brought us in to check the box towards the end of their diligence process before closing the deal. They already ran their credit analysis.
What we were doing was creating our own borrowing base calculation at a very granular level, and telling the lender if the borrowing base in their credit agreement made sense. The lender would often adjust their borrowing base formulas based on the report we issued. There were some instances where a lender would bring us in much earlier in the process and we constructed the entire borrowing base for them. These reports would also include qualitative assessments of business, collateral protection, management teams, inventory controls, AR processes, cash application, payables analysis, among other items.
The grunt work is what I would consider to be "audit-light". The juniors perform a number of audit tests on site and the results of these tests flow into the borrowing base analysis. The mid-level team members did more analytical work when putting together borrowing bases and flagging items the lender should be concerned about, with some proposed solutions. Senior team members reviewed the reports and generally led discussions with lenders. There was actually quite a bit of writing and the reports could be pretty long.
Our diligence engagements were primarily for BB and other large commercial banks, and size usually ranged from $200M to $1B.
Our work cadence was travel to borrower site for 1 week to perform field exam tests, interview management and various company personnel, tour the operations, perform some inventory counts, etc. Then we would be back in the home office spending the next week writing the report. Larger engagements could sometimes be 2 weeks across various sites with 2 weeks to write the report. There was travel all across the US and also internationally. However, I believe travel has decreased significantly since Covid. Hours were not bad, maybe topping out around 60-70, averaging around 40-50.
The boring repetitive work was the testing, and this is the starting point for all the junior personnel. I hated much of this but it was helpful to get a baseline understanding the world of ABL and collateral risk. Things were much more interesting after you moved up and out of the testing weeds.
At the end of the day, I knew it was not a role I wanted to stay in long term. While not the same as a traditional Big 4 audit role, the job is still 50% audit-like, and in most cases you are just checking a box for the lenders before the deal closes. But it was a good learning experience and I had a very good understanding of collateral risk and ABLs coming out of that role. It is a good springboard into various lending groups (banks and PC) that focus on ABL, you will be in a good position to compete for portfolio management and underwriting roles in the ABL world.
This response is super helpful. Would you say this role would be a good transition from capital markets accounting advisory at Big 4 into corporate banking if corporate banking is ultimately the end goal? Or would I be better off continuing to apply directly to corporate banking roles, even though interviews have been few and far between?
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