What are the five C’s of credit?

The five C’s of credit are character, capacity, capital, collateral, and conditions: the classic frame lenders use to size up a borrower. This learning path teaches them not as flashcards but as the live questions a lender asks about a real company, Riverbend Metalworks, so each C becomes something you can actually investigate in a file rather than recite.

What does a commercial credit analyst do?

A commercial credit analyst evaluates whether a business borrower can repay a loan. Day to day that means reading financial statements and tax returns, understanding why the company borrows, checking that the loan structure fits the purpose, and preparing the file and questions a credit officer or committee needs to decide. This learning path teaches the vocabulary, the thought process, and the process map around that seat.

How do banks make money on loans?

Banks lend depositors’ money and earn the spread between what they pay for funding and what they charge borrowers, the net interest margin, historically a few cents per dollar lent. That thin margin is why credit discipline exists: one loan that goes bad can erase the profit on roughly thirty-three good ones, which makes conservatism structural rather than timid.

What types of commercial loans are there?

The core toolbox: revolving and seasonal lines of credit for working capital, term loans matched to the life of equipment or other assets, owner-occupied and investor commercial real estate loans, construction loans that fund against a budget, and letters of credit. The craft is matching the facility to the borrowing purpose and repayment source, and recognizing when the wrong tool is being requested.

Do I need Accounting & Finance Foundations first?

Take Accounting & Finance Foundations first if statements are new to you: the capstone here asks you to read a real file with those skills. If you already read accrual statements and business tax returns fluently, you can test out and start with this learning path directly. Together, the two paths are the recommended preparation for the underwriting learning paths.

Available now

Commercial Lending Fundamentals

How commercial credit works.

The learning path that turns statement fluency into a lender’s way of seeing, built for branch managers, recent graduates, and hires from outside the industry. Riverbend Metalworks needs a line increase and an equipment loan, Cedar Row wants to build, and by the capstone a real credit file lands on your desk: three years of tax returns, company-prepared interims, and a decision that needs framing.

Core courses

~4.7 hrs

Total time

Case studies

$1,195

Full Learning Path · per learner

Cover it with a membership →

Path includes

6 core courses
2 complete case studies
Hands-on exercises throughout
Learning checks after every module
Quizzes after every course

What is Commercial Lending Fundamentals?

Commercial Lending Fundamentals is a self-paced online learning path that teaches new bank hires how commercial lending actually works: the vocabulary of loans and banking, the five C’s of credit and the three sources of repayment, the loan toolbox, collateral and documentation, and the credit team and its rules. 6 courses and 22 modules of 10-15 minutes each, ending with a guided first pass at a real credit file. It is the second of the two learning paths for new banking professionals.

One story, not a textbook

Every concept is taught inside a narrative world. Back at First Meridian Bank, the same two borrowers return with new business: Riverbend Metalworks needs materials and equipment for its biggest purchase order yet, and Cedar Row Properties wants to build. Vocabulary is defined at the exact moment the story needs it, and a living glossary accumulates every term into a searchable desk reference you keep after completion.

Free · No sign-up required

Not Sure If Commercial Lending Fundamentals Is Right for You?

Answer 10 questions in about 8 minutes. Get a score, a learning plan, and the courses that close your gaps.

Take the free assessment

Free whitepaper

Learn the Foundations Early, Compound the Returns for a Career

The research case for front-loading the fundamentals: what structured onboarding does to time-to-productivity, retention, and risk, why test-reinforced curriculum makes training stick, and how the two foundational learning paths fit together.

What Learners Say About Commercial Lending Fundamentals

I feel that Shockproof offers more in depth training and exercises are similar to those faced in live loan requests.

Commercial Loan Officer, Community Credit Union in Massachusetts

The path at a glance

Specs and Scope

Courses: 6
Modules: 22, 10-15 minutes each
Runtime: About 4.7 hours
Prerequisites: None

Topics covered

Core Courses

Commercial Banking Fundamentals

The language of business banking and how a bank actually works, taught before any later course assumes it. Covers the core lending terms, from principal, interest, term, maturity, and amortization to lines of credit, collateral, liens, guarantees, default, and covenants; how a bank funds itself with deposits and lends those funds back out, which is intermediation; how a bank earns money through net interest margin; the arithmetic by which a single loan loss erases dozens of loan-years of margin; and the credit terms every lender uses, from underwriting and portfolio to charge-off, reserve, examiner, and regulator. Closes on why credit conservatism is a structural consequence of a bank's economics rather than timidity.

The Five C's & Repayment Sources

How lenders think, taught as the frame a lender brings to every request. Covers the five C's of commercial credit, character, capacity, capital, collateral, and conditions, as a set of questions asked about a borrower such as Riverbend Metalworks; the three sources of repayment, with cash flow as primary, the guarantor as secondary, and collateral as tertiary; the order a lender works those three sources; and matching loan structure to purpose, including why a ninety-day loan against a twenty-year building is a mismatch.

Commercial Loan Types & Structures

The loan toolbox, taught as a set of facilities each matched to a need. Covers lines of credit, including seasonal and revolving lines against Riverbend Metalworks' spring purchase-order buildup and the warning signs of an evergreen line that never rests; term loans matched to the life of the asset they finance, including Riverbend's new CNC machining center; real estate loans across owner-occupied, investor, and construction lending, with Cedar Row Properties building its new property to teach draw structure, the budget, and completion risk; and letters of credit and the rest of the kit.

Securing and Documenting a Loan

Protection and paper: how a lender secures a loan and the documents that hold it together. Covers collateral in the real world, from liquidation value to the advance rates a lender will lend against it; how a lender perfects a security interest through a UCC-1 filing and how priority among lenders is established; real-property collateral, including the mortgage or deed of trust, the assignment of rents, title, and the Phase I environmental report; and guaranties together with the core loan documents, the note, the security agreement, the guaranty, and the loan agreement, and the job each one does.

The Commercial Credit Process

The credit team and the rules that govern how a loan is decided and managed. Covers the people who manage a loan, the relationship manager, the analyst, the credit officer, the credit committee, and loan review, and how a decision moves among them; the credit memo and its audience; risk ratings across the scale from pass to loss and what a rating signals; and the role of regulators, including examinations, lending limits, fair lending, insider lending, confidentiality, and loan review.

Capstone: Analyzing a Commercial Credit File

Your first credit file, worked end to end on Riverbend Metalworks. Covers the contents of a real file, three years of financial statements and the FY 2025 Form 1120-S with its Schedule K-1, interim statements, and the owner's personal financial statement, ranked by reliability with the gaps listed; finding the story the file tells by naming the borrowing cause, which is growth consuming cash; and framing the credit decision around purpose, repayment sources, and red flags without computing a ratio. Closes by bridging to the underwriting paths and naming precisely what they teach next.

What this learning path prepares you for

Foundations means fluency: reading statements, knowing the words, understanding why businesses borrow. The analytical craft is reserved for the underwriting learning paths, so you learn it once, properly, on top of solid ground.

Ratio computation and analysis
Cash flow construction (traditional and UCA)
DSCR calculation and projections
Guarantor and global cash flow analysis
Covenant design
Appraisals, cap rates, and NOI underwriting
The credit memo

Case studies coverage

The cases you work

Each case is a complete borrower file you work through the path, module by module.

Approved with Conditions

Riverbend Metalworks

The five C's of credit applied to a small manufacturer, primary, secondary, and tertiary repayment sources for a business borrower, a seasonal revolving line of credit for a spring purchase-order buildup, a term loan matched to a new CNC machining center.

Approved