Q&A: Credit Underwriter at Commercial Auto Finance Company

This probably won't gauge as much interest as other posts, but I'll give it a shot.

BACKGROUND:
1.) Recent grad. Started as a credit analyst and moved to an Underwriter/Underwriting Analyst position after 8 months. Non-target (employers in this line of business will give any competent grad a shot). Accounting and Finance degrees are preferred, but Mathematics or Economics majors are hired as well.

1.) I work in the commercial lending department at the captive finance subsidiary of a large auto company (think Ford, Mercedes-Benz, Toyota, BMW, etc.) with $50~ billion in assets. We provide "floorplan" inventory financing to dealerships (small businesses) for our manufacturer. We also provide real estate loans, term loans, revolving lines of credit, and assist automotive groups with financing asset purchase transactions. Typical credit lines range from $2-$50M for one dealership, $50-75M for dealership groups (2-4 dealers) and $75-$150M for large auto groups (5+ dealerships owned by a group of investors).

CAREER PATHS:
1.) There are several departments within the Commercial Credit division of the business. Most recent graduates start out as credit analysts assisting with basic preliminary credit analysis, loan documentation, or administrative tasks within the credit division. After 1-3 years, a credit analyst will move on to an Underwriting, Business Development, or portfolio management position. There are also entry-level analysts on the Business Development side in commercial credit, formally referred to as a "support analyst". An entry-level analyst may move to an "Analyst II" or "Senior Analyst" within their department.

SALARY:
1.) Depending on the geographic area, entry-level salaries range from $46-$52K base, plus bonus. Analysts starting out on the higher end of that range will bring home almost $60K all-in, with 2-3% yearly raises. Analyst "II" salaries generally range anywhere from $52-58K base. Salaries are highly negotiable (i.e. An entry-level analyst may end up with the same salary as an Analyst II, depending on their background.) Senior Analysts will make at a minimum, $60K base, and as much as $75K all-in.

WORK:
1) Pretty straight forward. The credit side consists of credit analysis, negotiating terms and conditions in loan agreements and/or promissory notes (with the assistance of legal counsel), preparing documentation, reviewing Uniform Commercial Code filings, and gathering all required items to ensure a deal takes place. Tax returns, bank statements, and all financial statements are analyzed. Once the financial statements are analyzed, adjustments are made. Business Development is primarily sales, with preliminary credit analysis before the "meat and potatoes" is analyzed by underwriters.

2.) Dealerships are not required to utilize the captive finance subsidiary for financing. Smaller dealerships will finance their operations using a small community bank. Mid-to-large size dealerships will use larger banks (Bank of America, JP Morgan Chase, Ally Financial, BMO Harris, etc.). A large part of the business consists of "stealing" business from other lenders, which essentially means courting the client and convincing them to change their lender. This process can be very gritty, as the current lender will obviously try to retain the dealership account by lowering interest rates, adjusting language in loan documentation to fit the account's needs, etc. Often times the existing lender will not cooperate with the lender that plans to "steal" their business, even after the client has stated that they are switching lenders. This process can drag out for days while terms are being negotiated.

Let me know if you have any questions.