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// ON THE DESKELEVEN MODULES, EACH WITH A FILE

Commercial Credit Learning Map

A course teaches the mechanics. Here each one meets a file where it decides something.

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED

// THE SHORT ANSWER

A commercial credit learning map sets out the subjects every lending course covers — reading the accounts, working capital, repayment capacity, leverage, quality of earnings, security and covenants, the borrower's industry, management and forecasts, the credit decision, monitoring, and the bank around it. This one puts each beside the guides that work it and a published case file where it decides something: the mechanics are the part a course can teach, the judgment is the part a file tests.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.

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Twelve numbers from two years of accounts, and the senior banker's written read on whether the growth is real, the cash converts and the suppliers are carrying the gap. Free, no signup, no data stored.

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Whether you are studying for a commercial credit qualification or learning it on the job, the syllabus is the same eleven subjects in roughly this order. Each module below says what a course teaches, where on this site that mechanic decides something, the guides that work it, and the cases where you make the call yourself before a senior banker's read.

  1. 01

    Reading the accounts

    WHAT A COURSE TEACHES
    The three statements, how they tie together, and the ratios drawn from them.
    WHERE IT DECIDES
    Issue 04 puts three years of accounts in front of the question, and marks what the reading used once you have answered.
  2. 02

    Working capital and the cash cycle

    WHAT A COURSE TEACHES
    Debtor, stock and creditor days, the cycle they make, and the money it ties up.
    WHERE IT DECIDES
    Issues 01 and 04: the same request on the same form, declined in one file and approved in full in the other.
  3. 03

    Repayment capacity

    WHAT A COURSE TEACHES
    Debt service coverage, fixed charge cover, global cash flow.
    WHERE IT DECIDES
    Issue 05: a comfortable ratio that turns out to describe one customer's contract rather than the business.
  4. 04

    Leverage and capital structure

    WHAT A COURSE TEACHES
    Debt to EBITDA, net and senior debt, gearing, and whether the debt can come down.
    WHERE IT DECIDES
    Issue 04: a plant loan that landed before its volume, and the earnings that grew into it.
  5. 05

    Quality of earnings

    WHAT A COURSE TEACHES
    Reported against underlying profit, accruals, cash conversion.
    WHERE IT DECIDES
    Issue 07: profit up 9%, operating cash flow down 31%, and three accounting choices assembling the difference.
  6. 06

    Security, structure and covenants

    WHAT A COURSE TEACHES
    Collateral and what it would realise, LVR and loan to cost, guarantees, covenants and conditions.
    WHERE IT DECIDES
    Issue 08: the security would have been there; the numbers that made it worth what the deck said were not.
  7. 07

    Industry and the borrower's market

    WHAT A COURSE TEACHES
    Industry structure and cycles, customer concentration, currency.
    WHERE IT DECIDES
    Issue 02: an exporter paid in US dollars, asking for currencies it will not name.
  8. 08

    Management, succession and forecasts

    WHAT A COURSE TEACHES
    Management quality, governance, key-person risk, testing projections.
    WHERE IT DECIDES
    Issue 03: a succession plan the bank hears about from the accountant first.
  9. 09

    The credit decision and the paper

    WHAT A COURSE TEACHES
    Approval authority, the credit paper, conditions before drawdown.
    WHERE IT DECIDES
    Issue 04, written up: a complete credit paper for a clean approval, every figure from the file.
  10. 10

    Monitoring, early warning and problem loans

    WHAT A COURSE TEACHES
    Annual reviews, covenant tests, watchlists, intensive care.
    WHERE IT DECIDES
    Issue 09: eight names, two intensive-care slots, and the difference between a bad number and a moving one.
  11. 11

    The bank around the decision

    WHAT A COURSE TEACHES
    Who sits where, who owns the risk, how a loan moves through the building.
    WHERE IT DECIDES
    The same files, read from the other chairs — the borrower's, the customer's, the shareholder's.

    MAKE THE CALL

ON THE DESK4 OF 18
NEXT IN THIS ORDERCash Flow Analysis The statement a desk reads first, and why.

THE WHOLE ORDER