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Commercial Credit Certificate-Course Description


The program consists of seven modules developed through 15 weeks of instruction and a one-week break. The underlying instructional structure of the courses is to prepare students to develop a loan package based on the analysis of the loan application of a business selected by each student in the third week of the program. The Commercial Credit Certificate’s curriculum has the following scope and sequence.


Module One -Banking Basics


  • The banking industry and its role in the economy
  • Recent changes in financial landscape, new regulations and regulatory agencies
  • Bank’s organization structure and business models
  • Global issues faced by commercial banks



Module 2-Financial Analysis


  • Analysis  of  income statements for predicting future business performance and helping assess risk or uncertainty of cash flows
  • Use of retained earnings statements to identify other types of income and restrictions on earnings
  • Relevance of liquidity ratio to measure corporate short-term ability to pay maturing obligations
  • Analyze traditional financial statements using  ratios that assess liquidity, activity, profitability, and coverage
  • Trend analysis of entities and industries
  • Understanding the balance sheet as a source to assess liquidity, solvency, and financial flexibility



Module 3-Types of Loans


  • Major sources and impact of credit risks
  • Analysis of borrowers’ financial statements to estimate and assess the quality of cash flows for commercial lending
  • Clients’ working capital information to assess the types and quality of collaterals
  • Recent credit quality problems and nonperforming loans
  • Credit analysis of real estate lending: debt service ratios, credit scoring system, perfecting collateral, foreclosure, power of sale
  • Credit analysis of commercial and industrial lending: overview of management, operations and industry
  • Five C’s of credit, cash flow analysis, financial ratio analysis, credit scoring models



Module Four - Tools of the trade


  • Analyzing market dynamics, cyclicality, and barriers to entrance in industry analysis
  • Analyzing the role of management, ownership and organization structure in credit analysis
  • Economic analysis: key economic factors
  • Developing an economic and industry outlook
  • Company analysis: management and ownership
  • Establishing the deterioration of a loan or company and defining a strategy to prevent or reduce losses




  • Classification of loans based on the UBPR
  • Real estate loans: commercial real estate loans, residential mortgage loans, secondary mortgage market, home equity loans, equity investments in real estate
  • Commercial loans to corporations: working capital financing, revolving credits, and term loans
  • Unsecured bank credits and secured credits
  • APR calculations of cost of secured and unsecured loans



Module Six- Conditions


  • Types of corporate entities and of organization document
  • Understanding the basic steps in a loan transaction
  • Identifying key loan documents
  • Analyzing the fundamental provisions of key loan documents
  • Gaining basic skills for negotiating loan documentation
  • Analysis and negotiation of commitment letters and term sheets
  • Overview of the due diligence process
  • Selecting loan documentation to fit the transaction
  • Analysis of key provisions in loan agreements
  • Drafting process for loan documentation
  • Overview of security interest perfection and priority



Module 7-Putting it all together


  • Understanding standard due diligence and credit execution/administration process to improve loan quality through accurate loan documentation
  • Identifying situations for setting appropriate financial covenants and thresholds
  • Loans conveyance and their effect
  • Identifying the basic objective of bank’s investment portfolio and the nature of its investment policy guidelines
  • Understanding loan structuring and pricing to match the client’s needs
  • Loan covenants: negative and affirmative
  • Loan structuring and pricing: ROA and RAROC models
  • Underwriting package project
  • Loan portfolio management and monitoring



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Last updated or reviewed on 10/23/14

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