Commercial Credit Analyst

An individual who reviews companies and entities seeking commercial credit

What is a Commercial Credit Analyst?

A commercial credit analyst is essentially the same as a credit analyst, with the added specification of reviewing companies or entities looking for commercial credit for purchases, as opposed to being in charge of reviewing credit applications by individuals.

 

Commercial Credit Analyst

 

Every time that an entity applies to a commercial credit lender for a loan, a commercial credit analyst is tasked with determining if the potential borrower’s credit can withstand or support the extension of a line of credit. The analyst must review the applicant’s financial history and other pertinent information to help determine how creditworthy they are.

 

Summary: 

  • A commercial credit analyst works to determine how creditworthy a business applicant is when it is seeking commercial loans.
  • They must collect and review an applicant’s financial information and other pertinent documents to get a better understanding of how financially stable the prospective borrower is and how willing and able they will be to repay any line of credit that is extended.
  • Education for a commercial credit analyst isn’t necessarily required to go past high school; most employers, however, prefer candidates with further education.

 

Top Responsibilities for a Commercial Credit Analyst

Commercial credit analysts study the applicant’s financial statements, yearly reports, profit and loss statements, as well as things such as market data and reports submitted by upper management. They must get a comprehensive picture of how financially sound a company is. They must also get a good sense of how a company performs and handles its business. The information assists them in understanding if a company can financially withstand the debt of a loan and if they can and will repay the loan in a timely and efficient way.

The evaluation of all pertinent records is the first step. A loan is essentially an investment in a company; lenders need to know how risky it is. It leads to a careful review of information, as well as speaking directly with financial representatives of the applying firm. All information gathered is then put together in a report that the commercial credit analyst will provide the lender to help it make a determination about offering the prospective borrower a loan.

Resolution of disputes doesn’t typically fall into a credit analyst’s purview, but, it may in a few cases.

 

Experience and Employers

It is not required that a commercial credit analyst obtain specific certifications or possess a certain education, outside of needing a high school diploma or GED. With this being said, employers tend to gravitate towards analysts with more education. Having a two- or four-year degree in mathematics, accounting, or finance is a good way to be set at the head of the pack.

It really depends on who chooses to employ the analyst. Commercial credit analysts work in all manner of industries, though they are primarily hired by individual analysis firms, banks, and other lending institutions. Some lending institutions prefer or even require that a credit analyst obtain an MBA before they even consider offering them a position.

 

Related Readings

CFI offers the Financial Modeling & Valuation Analyst (FMVA)™ certification program for those looking to take their careers to the next level. To keep learning and advancing your career, the following resources will be helpful:

  • Consumer Loan
  • Credit Utilization Ratio
  • Financial Analyst vs. Credit Analyst
  • Top Finance Certifications