Business Credit Analyst Course

Lesson 1 • The Credit Market Landscape

Covers the structure of commercial lending markets and key participants. Establishes the environment in which credit analysts operate daily.

Lesson 2 • Regulatory and Compliance Context

Outlines capital adequacy standards, lending regulations, and documentation requirements. Ensures analysts understand the compliance boundaries of credit decisions.

Lesson 3 • The Credit Analyst's Role

Defines analyst responsibilities, deliverables, and stakeholder relationships. Anchors all subsequent technical skills to a professional job context.

Lesson 4 • Credit Risk Fundamentals

Introduces default risk, concentration risk, and the five Cs of credit. Forms the conceptual backbone for all risk assessment chapters.

Lesson 1 • Adjustments and Normalization

Identifies owner add-backs, one-time items, and accounting policy differences. Normalized financials produce more accurate repayment capacity estimates.

Lesson 2 • Balance Sheet Interpretation

Analyzes asset quality, liability structure, and equity composition. Reveals the financial strength and leverage position of a borrower.

Lesson 3 • Spreading Financial Statements

Teaches the standardized spreading process used to compare financials across periods and borrowers. Accurate spreading is prerequisite to ratio analysis.

Lesson 4 • Cash Flow Statement Analysis

Distinguishes operating, investing, and financing cash flows and their credit implications. Cash flow analysis is the primary repayment source assessment tool.

Lesson 1 • Efficiency and Activity Ratios

Measures asset turnover, receivables days, inventory days, and payables days. Efficiency ratios expose working capital management quality and cash conversion speed.

Lesson 2 • Leverage and Solvency Ratios

Examines debt-to-equity, debt-to-EBITDA, and interest coverage ratios. These ratios quantify long-term financial risk and debt sustainability.

Lesson 3 • Ratio Benchmarking and Trend Analysis

Applies industry benchmarks and multi-year trend analysis to ratio interpretation. Contextualizing ratios prevents misdiagnosis of borrower financial health.

Lesson 4 • Profitability Ratios

Analyzes return on assets, return on equity, and net profit margin trends. Profitability ratios confirm whether operations generate sufficient surplus to repay debt.

Lesson 1 • Loan Sizing and Structuring from Cash Flow

Derives maximum loan amounts and amortization schedules from projected DSCR. Connects cash flow analysis directly to credit structure decisions.

Lesson 2 • Debt Service Coverage Ratio

Defines DSCR calculation methods, acceptable thresholds, and lender policy variations. DSCR is the single most critical metric in commercial credit underwriting.

Lesson 3 • Stress Testing and Scenario Analysis

Applies downside scenarios to test DSCR resilience under revenue declines and cost shocks. Stress testing quantifies the margin of safety in a credit approval.

Lesson 4 • Projection and Forecast Modeling

Constructs forward-looking income and cash flow projections from historical data. Projections support loan sizing and covenant setting for new credit facilities.

Lesson 1 • Guarantees and Credit Enhancements

Evaluates personal guarantees, corporate guarantees, and third-party credit support. Guarantees extend repayment sources beyond the primary borrower's cash flow.

Lesson 2 • Structural Protections and Covenants

Designs financial covenants, reporting requirements, and cross-default provisions. Covenants provide early warning and contractual remedies before default occurs.

Lesson 3 • Loan-to-Value and Advance Rates

Calculates LTV ratios and advance rates for each collateral class. LTV discipline ensures the lender retains an adequate cushion against collateral value decline.

Lesson 4 • Collateral Valuation Methods

Applies appraisal, orderly liquidation, and forced liquidation value concepts. Accurate valuation determines the true collateral coverage available to the lender.

Lesson 1 • Macroeconomic and Market Risk Factors

Links interest rate, inflation, and demand cycle risks to borrower cash flow sensitivity. Macro risk analysis informs stress scenario design and covenant thresholds.

Lesson 2 • Business Model and Competitive Position

Evaluates revenue diversification, customer concentration, and sustainable competitive advantages. Business model strength determines the durability of projected cash flows.

Lesson 3 • Integrating Qualitative and Quantitative Risk

Combines financial ratios with qualitative risk scores into a unified credit risk rating. Integration produces a defensible, holistic view of borrower creditworthiness.

Lesson 4 • Management and Ownership Assessment

Assesses management depth, track record, succession planning, and ownership structure. Management quality is a primary driver of borrower resilience under stress.

Lesson 1 • Presenting Financial Analysis in Memos

Translates spreadsheet analysis into concise narrative supported by tables and charts. Effective presentation ensures decision-makers grasp key financial findings quickly.

Lesson 2 • Conditions, Covenants, and Recommendations

Drafts approval conditions, covenant packages, and clear credit recommendations. Precise conditions protect the lender and set clear expectations for the borrower.

Lesson 3 • Credit Committee Presentation Skills

Prepares analysts to present and defend credit recommendations verbally to committees. Oral presentation skills are essential for advancing credit approvals efficiently.

Lesson 4 • Credit Memo Structure and Components

Defines the standard sections of a credit memo and their logical sequence. A well-structured memo guides readers efficiently to the credit decision.

Lesson 1 • Ongoing Portfolio Monitoring Practices

Establishes annual review cycles, covenant tracking, and financial reporting surveillance. Proactive monitoring prevents small problems from becoming large losses.

Lesson 2 • Early Warning Indicators

Identifies financial and behavioral signals that precede borrower default. Early detection maximizes recovery options and minimizes lender loss exposure.

Lesson 3 • Credit Risk Rating Migration

Manages the downgrade process from pass-rated to watch-list and classified status. Accurate risk rating migration triggers appropriate oversight and reserve actions.

Lesson 4 • Workout and Restructuring Strategies

Applies loan modification, forbearance, and restructuring tools to distressed credits. Workout strategies balance borrower recovery potential against lender loss minimization.