This specialized course equips participants with essential skills for analyzing business creditworthiness and structuring commercial loans effectively. Learners will explore comprehensive lending methodologies, risk assessment frameworks, and documentation requirements essential for sound credit decisions in commercial banking. The curriculum covers financial statement analysis, cash flow evaluation, collateral assessment, and industry analysis techniques used by professional credit analysts. Through practical case studies and real-world scenarios, participants will develop the ability to identify warning signs and construct comprehensive credit proposals that balance risk and return while ensuring regulatory compliance.
Commercial Lending and Credit Analysis
Banking, Insurance and Financial Services
October 25, 2025
Introduction
Objectives
Upon completion of this course, participants will be able to:
- Apply financial ratio analysis to assess business financial health
- Evaluate borrower character, capacity, capital, and collateral
- Structure appropriate loan terms, conditions, and covenants
- Conduct comprehensive industry and market analysis
- Prepare detailed credit memorandum and risk assessment reports
- Monitor loan performance and identify early warning signals
- Understand regulatory requirements for commercial lending
- Assess cash flow adequacy for debt servicing capability
- Develop effective credit risk mitigation strategies
Target Audience
- Credit Analysts and Underwriters
- Relationship Managers in Commercial Banking
- Loan Officers and Credit Managers
- Branch Managers handling business loans
- Commercial Banking Trainees
- Risk Management Professionals
- Small Business Bankers
- Portfolio Management Staff
Methodology
- Mini-case studies on business credit evaluation
- Group analysis of financial statements
- Individual exercises on covenant setting
- Syndicate discussions on loan structuring
- Scenario-based risk assessment activities
- Role-playing client meetings and negotiations
- Credit memo preparation exercises
Personal Impact
- Enhanced financial analysis capabilities
- Improved risk assessment and decision-making skills
- Stronger loan structuring and documentation abilities
- Better understanding of regulatory compliance
- Enhanced client advisory and relationship skills
Organizational Impact
- Improved credit quality and reduced NPA ratios
- Enhanced risk-adjusted return on lending portfolio
- Streamlined credit approval processes
- Stronger client relationships through professional advice
- Better portfolio monitoring and early problem detection
Course Outline
Unit 1: Fundamentals of Commercial Lending
Basic Principles- 5 Cs of credit analysis framework
- Types of commercial loans and facilities
- Regulatory framework and compliance requirements
- Credit risk management principles
Unit 2: Financial Statement Analysis
Assessment Techniques- Balance sheet analysis and interpretation
- Income statement evaluation and quality assessment
- Cash flow statement analysis techniques
- Financial ratio calculations and industry benchmarks
- Working capital analysis and management
- Leverage and coverage ratio analysis
- Profitability and efficiency metrics
- Common size and trend analysis
Unit 3: Cash Flow Analysis
Cash Flow Assessment- UCA cash flow methodology application
- Debt service coverage calculations
- Free cash flow analysis and projections
- Cash flow forecasting techniques
- Cash flow quality and sustainability
- Sources and uses of funds analysis
- Cash flow volatility assessment
- Stress testing cash flow scenarios
Unit 4: Industry and Business Analysis
Market Assessment- Industry risk assessment frameworks
- Competitive positioning analysis
- Management capability evaluation
- Business model sustainability assessment
- SWOT analysis application
- Market positioning and competitive advantage
- Growth prospects and market dynamics
- Regulatory and environmental factors
Unit 5: Loan Structuring
Facility Design- Term loan structuring principles
- Working capital facility design
- Collateral assessment and margining
- Covenants and conditions design
- Types of collateral and security interests
- Security perfection processes
- Guarantees and third-party support
- Subordination and inter-creditor arrangements
Unit 6: Credit Documentation
Legal Framework- Loan agreement components and negotiation
- Security documentation requirements
- Guarantees and indemnity provisions
- Perfection of security interests
- Condition precedent documentation
- Ongoing condition requirements
- Document tracking and compliance monitoring
- Amendment and waiver processes
Unit 7: Portfolio Management
Monitoring and Control- Early warning signal identification
- Loan review processes and procedures
- Restructuring and recovery options
- Portfolio quality assessment techniques
- Concentration risk management
- Sector risk analysis and monitoring
- Credit risk grading systems
- Portfolio stress testing
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