Small Business Credit Analyst Salary – A Credit Analyst is a financial professional who assesses the creditworthiness of a client (business or individual) based on financial information or other relevant information. The purpose of this analysis is to determine how much risk the bank can take on that particular customer.
Credit analysts are the gatekeepers in the Bank’s basement. Its main role is to gather all relevant information about the potential client, compile it into a standard and easy to digest format and provide it to loan managers and originators who will make the final assessment on whether or not to lend.
Small Business Credit Analyst Salary
A credit analyst’s sole job is to manage the credit risk of all the bank’s customers assigned to them. Credit risk is essentially the risk of defaulting on any type of loan or other outstanding debt of the customer. A credit analyst is the one who should verify the customer’s ability to repay the loan. This is a six-step process:
Credit Analyst Job Description
(Note: The credit analyst does not make the final lending decisions. This is done by a separate group or senior committee to avoid conflicts of interest. Credit analysts place the most reasonable credit before the decision makers.)
All of the skills mentioned above are “good for those who have it”, but the most important thing employers look for is your technical ability for mathematical analysis and logical thinking. Showing some skills certainly can’t hurt, but your ability to crunch numbers and use common sense is what’s needed. Consistency, discipline, and accuracy will likely be the next set of skills that must be demonstrated on your resume and in the interview process.
The best way to demonstrate these skills is to earn high grades in math-intensive subjects such as accounting, finance, business, or engineering. There are also specific certifications, such as GARP Financial Risk Management, that can add value to any risk-related work involving credit analysis. It’s not necessary by any means, but if you’re looking to break into a top company and stand out from the crowd, an FRM certification will definitely help you.
Moving on to interpersonal skills, there’s nothing wrong with your resume showing many leadership qualities, but remember that this is a support role where you help others make decisions. I would like to hire a credit analyst who is eager to learn the tools of his trade to develop a comprehensive understanding of banking products and lending principles.
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I would highly recommend the following course: Certificate of Competency in Credit Risk Analysis at the New York Institute of Finance (NYIF). It’s online, takes about 35 hours to complete, and comes complete with an official NYIF certificate.
I’ve spent a lot of time reviewing the curriculum for many disciplines and this is the best option from a practical point of view for the Case Analyst role. Participants who pass the exam receive a Certificate of Competency in Credit Risk Analysis from the New York Financial Center. This provides, in my opinion, the best way to gain experience in credit analysis work. You get “table-ready” practical information and a strong name to put on your resume.
The Certified Banking & Credit Analyst (CBCA) from the Corporate Finance Institute is another great option. It also focuses on credit analysis from a corporate and institutional banking perspective.
Any credit experience should be clearly emphasized front and center. Any other risk experience will also be acceptable, even if not directly related to credit risk. I highly recommend one of the above courses if you are looking to enhance your personal brand and highlight your skills.
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Salaries vary widely from country to country and are based on your general work experience. Bank earnings are highest in financial capitals such as New York and London, followed by other hubs such as Frankfurt, Paris, Hong Kong, Singapore and several US cities.
A first-year credit analyst can earn around USD 80,000 in the US or EUR 60,000 in Europe. There may be a variable component on top of that of around 30%, which should increase over time as you get better at what you do. Also remember this is your first year salary, it will increase exponentially with experience. The first 1-2 years are when you focus on learning your craft. Typically, after three years, you start to become a valuable and trusted resource. Once you have a few years of experience and a good reputation, you can double your down payment in a short amount of time.
These salary figures also depend on the bank you work for and the type of clients you deal with. A small regional bank will pay less than a global banking giant. It is unusual to receive $100,000-120,000 from a major bank to handle its Global Fortune 500 clients. But these roles are rare and I want to emphasize that it depends on the bank and location.
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A more reliable way to analyze salaries is to compare them with other banking jobs. A bank credit analyst typically earns more than a banker, but less than a corporate banking relationship manager or someone in an investment bank. Credit analysts are a cost center for the banking industry, but they are paid handsomely compared to most of their mid-office counterparts.
Credit risk assessment is one of the most important skills in banking and will help you throughout your career. Credit analysts act as custodians of the Bank’s wealth. As a result, they are often considered artistic geniuses. It is also important to mention here that many banks require their salespeople to have some sort of prior credit experience. A 3-5 year tenure as a Credit Analyst really increases your chances of moving up, as long as you meet the other skill requirements.
Credit proposals each year. If you’re looking at a large corporation where the entire bank relationship is worth billions – you can’t manage more than 10 of those clients a year. But if you’re looking for small to medium clients with a modest screen, you can expect to handle a lot of volume.
The first data is sent to you by the front teams (marketing/relationship people). They’ll really get you making recommendations quickly, and (at some banks) you can get indirect feedback from them! So you’re really split between business founders who want every proposal completed and risk takers who need to make sure the bank doesn’t go bankrupt doing just that.
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Buyers. Some banks have separate groups for new customers and a separate group for existing customers, but this is not always the case. The reason for this is continuity – if you’ve been approved for a loan, you’re in a better position to look into it in the future. Keep in mind that some of these loans are revolving so they don’t expire. You just check in regularly and keep updating financial performance from year to year. Most banks will perform a full annual credit review of each customer.
In addition to the annual review, just look at different credit situations. For example, any consolidation of sales or any increase in the value of a currency beyond a predetermined level may require you, as a credit analyst, to initiate an immediate credit risk review. As you can imagine, the longer the exposure, the more sensitive these factors become.
You may have already thought that this is not a role that requires a lot of travel. You’re used to sitting at your desk and looking at various documents, such as client financials, business news, or proposals you’re working on. If you are working on a new proposal, it may take several phone calls with the client to get the necessary information. But you will be helped by the relationship group in this situation. However, you know clients in senior roles.
Your main source of information will be the client’s finances – Balance Sheet, Profit and Loss Account, Financial Statements, Auditor’s Reports, Management Notes, etc. Loan decisions are made based on the information you provide, so accuracy and attention to detail is very important.
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Credit analysts have a lot to offer when it comes to work-life balance. Your job is usually 9-6 and weekly numbers tend to be around 45 hours. Can be busy going to
