Commercial Credit Analyst Career Path
I am an undergraduate finance major. I am heavily interested in becoming a commercial loan credit analyst. Is it possible to get an entry level job in the commercial credit loan industry? If not, would starting off as a consumer loan credit analyst be a good start or should I go into corporate finance entry level? Do I have to get an MBA in order to get the job? If you have any other career path information let me know.
Hi dhk413, no, I never sleep and so I can respond to any lonely threads (like this one) at all hours of the night. Impressive, I know ;-)
If we're lucky, maybe these professional users will respond: BuySide Bro @ushma821" Oluferanmi-Akinpelu
If those topics were completely useless, don't blame me, blame my programmers...
It is very possible to get an entry level job in the commercial credit loan industry. You don't need an MBA (though it could help you get your foot in the door for an interview), but you do need to be prepared to discuss the balance sheet, income statement, and cash flow of companies in the industry of the analyst job for which you are applying. More and more I see commercial credit analysts coming in for interviews with an MBA in Finance. Companies prefer MBA in Finance, but from my experience, an MS in Accounting is more useful. Starting off as a consumer loan credit analyst would not help much other than if you want to transition into a commercial credit analyst position where the loan facilities rely on individual guarantor/owner support. Also, you should determine which level of companies you would like to work with. Business banking, commercial banking, middle market banking, or corporate banking (very competitive). These classifications are determined by annual company revenues but the thresholds for classification can vary by bank. In some commercial banking roles, the analyst will be encouraged/required to move into a relationship management role, so you'll want to ask about this in your interviews. Some banks will allow you to stay in credit/underwriting and move up the ranks as an associate/AVP, to VP and other senior officer positions which come with increasing account responsibility. My understanding is that Corporate Finance is very different from Commercial Credit Underwriting, so you'll want to understand the differences of those as well and what the career trajectories are for each.
FWIW in my first year out of uni I worked in credit lending at a major Australian bank. Not sure if you're in Australia/the US/elsewhere so can't speak to the other countries, but in Australia there is a split between SME/Commercial/Corporate lending based on debt/revenues sizes for borrowers and there are huge differences in the type of work you'll be doing in these different segments.
At the lower level (SME) you are a glorified policy monkey. Bank lending at this level ($10m of revenues/debt) is very policy driven and is therefore a lot of box checking to make sure that the deal fits in with existing bank policy. I would not recommend this path to anyone unless they had no other options, and even then I wouldn't recommend it.
At the Commercial/Corporate level things start to get mildly interesting from an analytical POV, but this will max out around building basic three-way models, financial/ratio analysis/comp analysis, working capital analysis et cetera. I personally got bored of assessing the same metrics over and over. The real fun occurs on the deals that perhaps don't fit within existing bank policy but which you are able to structure so as to bypass Risk anyway.
If you could confirm what exact level of credit you'll be dealing with that wold be very helpful. Interview questions would be focused largely around fit with some quantitative questions here and there ("What is an ideal Debt/EBITDA ratio?" etc). I would expect some basic past experience/internships would be required however you could differentiate yourself in other ways.
Why are you so interested in working in credit? Even in my one year in Corporate Debt I was starting to feel typecast as a credit analyst so I'd potentially look at other options if it's not something you want to be doing long term.
Commercial Credit Analyst (Originally Posted: 11/30/2017)
I am in the process of finding my first job out of college. To give you some background, I had an internship last summer as an analyst at a boutique bank. I just got accepted for a Commercial Credit Analyst position. I like the position but havent given up on searching for an analyst position at an investment bank. A lot of the BB banks have already hired next years analysts so my only option would be to find a smaller bank. But the clock is ticking. Is a Commercial Credit Analyst a valued enough position to eventually lead into investment banking or would it close a lot of future doors?
If you truly want IB, try as hard as you can to get IB. A lot of people in Credit jobs are there because they want to be there. I’ve seen credit analysts (working with large corporate clients) lateral to boutique shops but if you really want IB try as hard as you can to get it up front. Commercial Credit is better than nothing though bad you’ll actually get a solid foundation in credit. It is not really transferable to IB though
That's what I figured. I believe I have strong enough qualifications to get into IB right away as well. However, all the big banks have already hired their analysts for next year. How do you recommend me getting in still? And what other jobs could I get out of college that could eventually lead to IB besides the basic IB analyst position?
Has anyone here been a commercial credit analyst before? (Originally Posted: 05/22/2015)
If so, what are the best resources available to study up on global cash flows?
Most banks are going to have their own proprietary global cash flow model. Are you trying to prepare for an interview?
Check this out.
Some things you should practice to really make you stand out are as follows: Reading a personal tax return, including digging deeper into schedule E,C as well as the schedules. Look into S corp tax returns as these tend to be tricky, in the sense that it is a pass through entity. Practice reconciling the front page income statement to GAAP through using the m-1 and schedule K information and learning about the section 179 deduction as well as various tax laws. THE BIGGEST THING and a way to impress in an interview is knowing that companies under x amount of revenue(think 10 millions) do not use accrual accounting on a tax return, meaning that revenue from incomplete contracts and expenses are not included as well as the corresponding balance sheet items.
Just practice, google tax return example packets and throw together some financials. Know Loan to Cost and Loan to Value calculations as well as leverage ratios and working capital. Practice Cross Aging receivables and calculating borrowing power. USE UCA CASHFLOW instead of traditional cash flow and EBITDA, I use all three in some way, but UCA is the biggest as it gives the entire picture as well as financing need as a deficit. I would recommend researching all of these topics, as on my first ever interview I got killed, this is not stuff you learn in college.
Newbie aspiring commercial credit analyst (Originally Posted: 06/19/2017)
Hello, I am one year from graduating a decent business school with an ok GPA, working as a teller for a big bank. My ideal job right out of school is at regional headquarters of my same bank about 20 minutes away, as a commercial credit analyst. A friend of mine just got hired to the former analyst position and I know they will be taking one more in the next year, so I am gearing up for that and other potential interviews. I have also looked at compliance consulting, but that position is with another company. They say that my teller experience makes me a unique candidate to help banks with regulatory/compliance issues. I'm not well informed on the salaries of either of these positions out of school.
Any advice is welcome!
.
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Know Excel
When you get in, memorize by heart your divisions policy.
Know the deals that you are assigned to. (What do they do, how do they do it, how do they bill/collect, WHY is this loan what they need)
Know modeling.
Read the loan docs/underwriting. If you ever have a question, don’t ask anyone anything before you read them.
I’m a first year analyst going on 2 years at a very small but rapidly growing bank and that advice would have saved my credibility a thousand times over.
Commercial/Corporate Credit Analyst Career Development (Originally Posted: 10/20/2016)
I have basically been handed a blank check (within reason) by my company to do some continuing ed courses. As a third year analyst looking to jump from the lower middle market space to upper MM/corporate finance, are there any courses/programs/overnights that would look particularly good on the Resume? Or anything that is awful and that I should avoid?
Bump.
Training the Street is great, cost is $5k for a week.
Good look. Thanks
That is awesome does and MBA count, or maybe some extension school? huahuahua.
I know there are some online courses on sites like EDX, and Coursera that cost maybe a few hundred each. Since they are cheap, self paced, and you will have content available for life (presumably) these online courses could be a great ADD-ON to any other program.
You should try a seminar type thing to get you the benefit of networking. You could also try for the CFA?
So my company does offer tuition reimbursement, but you basically have to sign a contract stating you'll be there for "x" more years upon graduation, which kind of defeats the purpose (this was the first thing I asked my bosses about). Ive found some stuff online like you mentioned in your second paragraph, which all look great and I'm sure will be good for me personally, but I'm not sure/more concerned with what is considered more valuable to a perspective employer.
Why don't you try moving the thread out of the "other industries" to the "corporate finance" forum, it would probably get a lot more views there, and potential more relevant responses.
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