Commercial Credit Analyst Salary
Commercial credit analysts are specialized roles that assess credit ratings.
What Is A Commercial Credit Analyst?
Commercial credit analysts are specialized roles that assess credit ratings. In particular, they check the creditworthiness of commercial borrowers. These include organizations and companies.
In many commercial transactions, these employees have a key role. They must ensure that the lender is making a loan to a commercial borrower who will repay them. They play an important role in the lending process by providing information to financial institutions.
These analysts review the financial documents of commercial borrowers. These include financial statements, balance sheets, income statements, and cash flow statements. This helps them to determine the risk of lending to a commercial borrower.
By examining the commercial borrower’s finances, the analyst can understand the ability of the borrower to generate cash flow.
People who have this role must be attentive and have strong communication skills. Since they must communicate their findings to groups like stakeholders, business owners, and finance executives, they must be able to gather the right information and share it accordingly.
The current job market has a high demand for credit analysts. In general, credit analysts serve an important role in the economy.
Key Takeaways
- Commercial Credit Analysts expect to work 40-hour weeks.
- Salaries are affected by: location, industry, size of the organization, and level of experience.
- Entry-level analysts usually make at most $65,000.
- Mid-level analysts usually make at most $90,000.
- Senior-level analysts usually make at most $160,000.
Commercial Credit Analyst Salary Ranges
The salaries of analysts can vary heavily. Several factors affect an analyst’s salary. These are location, industry, the organization's size, and experience level.
Entry-level analysts earn an annual salary between $45,000 and $65,000. That range becomes $65,000 and $90,000 when we are discussing mid-level analysts with a few years of experience and a foundation in credit analysis.
Then, we move on to experienced, senior-level analysts. These employees have annual salaries that go up to $160,000.
Note
Keep in mind that bonuses, incentives, and benefits also contribute to the amounts described above.
Although commercial credit analysts are a specific type of credit analyst, it is still interesting to see the general ballpark for the pay.
As of May 2022, the mean annual salary for credit analysts was $92,180, and the median salary was $78,850.
Here are the percentile wage estimates for annual salaries:
- 10% - $47,960
- 25% - $60,290
- 50% - $78,850
- 75% - $105,900
- 90% - $161,800
The highest-paying states for credit analysts are:
- New York - $139,170 (annual mean salary)
- Virginia - $103,480
- Rhode Island - $101,060
- North Carolina - $99,400
- California - $97,970
The top-paying industries are:
- Securities, Commodity Contracts, and Other Financial Investments and Related Activities - $139,570 (annual mean salary)
- Monetary Authorities-Central Bank - $122,480
- Business Support Services - $105,930
- Automobile Dealers - $104,330
- Management of Companies and Enterprises - $97,740
It is important to be aware of these figures when understanding the demand and seeing which areas offer higher compensation.
A Day in the Life as a Commercial Credit Analyst
Every day is different for this role. But most days involve the same activities, maybe just at different times. The work is very important, though.
Credit analysts can expect to work 40-hour weeks. However, if a project has an upcoming deadline or a rush request, they may have to work overtime. Analysts might also be required to travel to a borrower to prepare an agreement.
Most credit analysts are assigned 2-5 deals a week. Here is an analyst’s schedule:
| Time | Activities |
|---|---|
| 9 AM - 9:30 AM |
|
| 9:30 AM - 10:30 AM |
|
| 10:30 AM - 11:30 AM |
|
| 11:30 AM - 12 PM |
|
| 12 PM - 1 PM |
|
| 1 PM - 2 PM |
|
| 2 PM - 3 PM |
|
| 3 PM - 4 PM |
|
| 4 PM - 5 PM |
|
Throughout the day, analysts must update and maintain their records of credit analysis and other information; they must be up-to-date with industry news and regulations. Analysts have plenty of work to do from 9-5 and after.
The day in the life of a commercial credit analyst is jam-packed. There is a lot of time-sensitive and regulatory work.
Let’s look at the daily work life.
Commercial Credit Analyst Job Qualifications
Since this job is very specific, certain qualifications are highly sought after by employers. A candidate’s expertise can make or break if they land the job.
Qualifications include:
- Bachelor’s degree in accounting, economics, finance, or a related field
- MBA (master’s degree in business administration) or finance is preferred
- Strong understanding of financial statements, credit analysis techniques, industry-specific knowledge, and risk assessment
- Experience as a commercial credit analyst or a similar analyst role
- Proven track record of accurately managing risk and assessing creditworthiness
- Proven experience analyzing leverage and collateral
- Strong analytical skills, namely, assessing cash flow, reviewing financial statements, and analyzing financial ratios
- Great understanding of industries, economic indicators, and trends in the markets
- Strong verbal communication skills
- Knowledge of commercial loan policy and the commercial lending process
- Effective written skills
- Experience with preparing credit reports and presenting findings to stakeholders
- Experience with preparing written loan presentations
- Organization skills
- Meticulous
- Able to collaborate in a fast-paced environment
- Commitment to remaining current on all legal and compliance matters
It is advised that candidates not apply straight out of college, as they still lack practical experience. Have a few years of experience in a profession that deals with analysis, financial statements, etc., and then apply to be a commercial credit analyst.
Recently, many credit analysts have taken certificate courses. Try to tack on a few of these courses to learn skills that will be useful for this position.
Certifications are not mandatory. No employer will ever criticize someone who does not have a certification. However, they may be more likely to hire someone if that candidate has one.
Certifications show commitment and a desire to learn. For these reasons, one should try to take certification courses, but there is no requirement.
Candidates can also join a community of like-minded individuals who share an interest in business credit–the National Association of Credit Management (NACM). Here, members can learn about the industry and network with many others in the field.
This society holds events for professionals to meet and network. These are great talking points when applying for jobs, as you can go into detail about what you have learned and how you will apply it to your professional journey.
Commercial Credit Analyst Job Trends
In recent years, the demand for analysts has increased. There are several reasons why this is the case.
Let’s take a look at the factors why the demand has increased.
- Complexity of the business landscape: Global markets and increased regulations all lead to more specialized knowledge and skill sets for assessing credit risks. The demand has increased for credit analysts in general.
- Since this role is a specific sector of that, it makes sense as to why it increased as well. Many organizations are relying on analysts to mitigate risks.
- Increased regulations: Since the financial crisis in 2008 and the COVID-19 pandemic, regulatory frameworks have become more stringent. Lenders and financial institutions must comply. Hence there is an increased demand for credit analysts.
- Risk management awareness: The past decade has seen numerous top companies become bankrupt due to ineffective risk management protocols. That is why almost every company needs credit analysts.
- With credit analysts come commercial credit analysts. The demand for these specific analysts increased as organizations recognized the need for proper risk management to stay afloat.
- Technology advancements: Jobs are not performed the same way as they were 5-10 years ago. For analysts, some tools streamline the lending process and analyze data more efficiently. Data analytics, machine learning, and automation can allow analysts to work more productively.
- As younger candidates come along, they are usually more adept at using these tools. Hence, the demand for this role has increased in recent times.
Conclusion
The demand for commercial credit analysts has grown significantly in the last few years. These analysts play a major role in commercial and investment banks.
Analysts have a lot at stake by assessing creditworthiness, utilizing responsible lending practices, and lessening the chance of risks.
As mentioned, the chief employers are commercial banks, investment banks, and other financial institutions. These employers all provide credit services and lend to borrowers.
The best aspect of this role is that it is not limited whatsoever. There is no pressure to stay only on the banking track. So long as you have the right skills of a commercial credit analyst, you can transfer them to sectors like economics, equity research, and accounting.
The current job market for this role is appealing as there are numerous opportunities to grow. An analyst can learn a lot about top employers recruiting and options to take certification courses.
The salary for this role varies on some factors. The primary factors are location, organization, experience level, and industry. The low end for salaries is at $45,000. The top salaries are around $160,000. Keep in mind these figures include benefits and bonuses.
As the demand for commercial credit analysts grows, individuals looking to work in credit should genuinely consider this career. It is a dynamic and rewarding profession. Commercial credit analysts are thriving in this continuously-evolving financial landscape.
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