Course

Course Summary
Credit Type:
Course
ACE ID:
ABAN-0162
Organization:
American Bankers Association
Location:
Classroom-based
Length:
12 weeks (34 hours)
Dates Offered:
Credit Recommendation & Competencies
Level Credits (SH) Subject
Upper-Division Baccalaureate 3 Commercial Lending, Banking, or Finance
Description

Objective:

The course objective is to teach qualitative analysis and how to assess industry risk, market risk, and management risk of a commercial loan; provide an understanding of the role of loan policy and the need to summarize the borrower's various risks into an appropriate credit risk rating; provide guidance on loan structuring and documentation issues in response to the analysis of quantitative and qualitative risks; provide an overview of key documents, loan agreements and covenants, as well as negotiating and pricing; and introduce problem loans.

Learning Outcomes:

  • Recognize the process and types of information business bankers should acquire during a business development call
  • Identify industry, market, and management risks that can affect a borrower
  • Describe the loan review process as an independent validation of risk ratings and other commercial lending issues
  • Identify borrowing structures and describe their advantages
  • Identify sources of repayment that are appropriate for various commercial loan borrowing arrangements and the factors that affect collateral value
  • Identify and explain the loan negotiation process
  • Explain the steps in resolving a problem loan
  • Describe the loan review process as an independent validation of risk ratings and other commercial lending issues using qualitative analysis and how to assess industry risk, market risk, and management risk of a commercial loan
  • Discover loan structuring and documentation issues in response to the analysis of quantitative and qualitative risks
  • Determine overview of key documents, loan agreements and covenants, as well as negotiating and pricing of loans
  • Explain the importance of a credit investigation and describe what it entails
  • Identify the key elements of a credit risk rating
  • Describe the loan documentation process and requirements
  • Identify the costs and causes of problem loans

General Topics:

  • Commercial lending process and initial business development calls
  • Credit investigation and assessing industry, market, and management risk
  • Loan policies and procedures, including credit risk ratings
  • Loan packages and credit write-ups
  • Commercial loan structuring
  • Identifying viable secondary and tertiary sources of repayment
  • Key documents, loan agreements, and covenants
  • Loan pricing and negotiating
  • Problem loans
Instruction & Assessment

Instructional Strategies:

  • Case Studies
  • Computer Based Training
  • Discussion
  • Practical Exercises

Methods of Assessment:

  • Examinations
  • Quizzes

Minimum Passing Score:

70%
Supplemental Materials