Commercial loan officer (Term Paper Sample)

COMMERCIAL LOAN OFFICER
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Commercial loan officer
Choosing the right career path is a process that requires one to know his/her strengths and weakness, likes and marketability of the career. Some career may require direct dealing with people, where others may involve spending long hours alone. Some involves math, where others are purely, theoretical. The kinds of career choice one make determine his/her future opportunities and employability (Emerald Group Publishing p.2). Following a career as a commercial loan officer is an exciting area. The career is well rewarding and involves interacting with a diverse people and professional. The career involves going out to the people and help them with the loan application and repayment. Loan officers are involved with evaluating, advising and authorizing loans to businesses and people. The paper will look into the professional, academic, legal and responsibilities of a commercial loan officer. The paper also looks at the importance and expectations of a commercial loan officer to the society and to the business.
Commercial loan officer has many duties and responsibilities (U.S. Department of Labor p.109). Each is done to ensure risks are reduced when offering loans. Loan officer can be a representative of a credit union, a financial institution or a bank and is involved in finding and assisting the borrowers in getting the appropriate loans. Loan officer can work on either mortgage or consumer loans. The loan underwriters are specialized loan offers, who access and analyze the credit worthiness of borrowers and see if they are safe to offer a loan. Commercial loan officers may travel far to negotiate and sign complex loan agreements.
One of the major day-to-day duties of a loan officer include going out to look for the potential borrowers and try convince them to take a loan (United States. Bureau of Labor Statistics p.112). The loan office will oppose different individuals and business and act as a loan salesperson. They will explain the pros and cons of a loan and the advantages of the potential borrowers. The commercial loan officer will offers advice to the potential borrows on various aspects of the loan. Commercial loan officer will assist the commercial loan clients, in the process of application for the loan. The process may involve much legal processes and paperwork, and the loan officer will help them understand all the requirements. He/she will also be there to reduce the amount of fatigue and frustration that can result from rejections in various requirements, to qualify for a loan. Loan officer will educate the client on where to get various loan requirements easily.
The commercial loan officer is supposed to gather information about various clients and potential risks and lending challenges that may be associated with the loan. The commercial loan officer is supposed to have the historical credit worthiness of the client and the financial information. This will help establish the levels of the creditworthiness of the potential borrower, and this will influence the decision to offer a loan (Seupel p.37). A commercial loan officer may involve in process the loan if they work with a mortgage broker. The commercial loan officer will work in a variety of settings and he/she deliver the work with outmost professional ethic and secrecy with the client’s information. They guide the client in the process of applying for a loan which starts with the individual contacting the bank to the loan approval.
Commercial loan officer works for 40 hours in a week, but the time may increase depending on the numbers of clients one has. Most of time is spent analyzing and meeting the potential borrowers (U.S. Department of Labor p.110). The loan officers become more engaged in the periods when the interest rates are low, and since they are paid mostly by commission, they are free to take as many clients as they can. They have to understand the financial statements, business accounting and cash flow analysis. The commercial officers handle sensitive data of individuals and companies, and they need to be people of high integrity, trustworthy and smart.
Commercial officer will also advise the loaning institution of various loan products and loan schemes. Loan officer will act with many professionals in giving the best and less risky loans to both clients and the institutions. They are an integral part of the financial milestone in the lives of the clients and financial institutions. The commercial loan officer will, therefore, act as a loan advisor to both the borrowers and the loaning institution. To the client, the advice may involve various aspects of the loan (Fitch p.20). One is the available loan schemes and the requirements of each scheme. Different financial institutions offer a wide variety of loans, which are tailored to fit different individuals and institution. The loan one would qualify for is determined by various factors such as financial capabilities, credit rating, and repayment periods. The loan officer will look into the client financial position by the look at the pay slips, profitability and other such factors to determine what loan requested.
Financial capabilities will determine the level of risks associated with different clients. The loan borrowed should be compatible with profitability or pay for various clients. The commercial loan officer will meet up with customers and allow the loan decision to be guided by knowledge and worth for taking up the loan. On the side of the loaning financial institution, the commercial loan officer will offer several advisory services (Johnson p.19). One will be to advise on the qualification of the potential borrower for the loan applied. Then, the loan officer wills advice on the appropriate payment period, the amount to be offered and on the rate of interest to be applied. The loan officer has information about the client and the financial institution and can act as a negotiator between the two entities, to reach into amicable loan agreement. Loan officer will also, have information about the market, and this will help in determining the best rates to apply for the given loan. Loan officer will have to gather huge data about the various conditions that may affect the loan repayment and interest rates, and this allow them to offer the best guidance to the loan borrowers and lending companies.
The commercial loan officer requires special skills since they spend most of the time in selling loans and summarizing huge amount of data. There is also a need to have the necessary professional qualifications. To pursue a career as a loan officer, one need to have at least a bachelor’s degree in the areas of business, fiancés, accounting economics or a related field. Further, the loan officer is required to have the right experiences in banking, before embarking on a career as a commercial loan officer (Seupel p.38). The loan officers are also supposed continuously advance their education and knowledge of the prevailing market conditions, and the emerging financial trends. The senior loan officers may require having a master’s degree in credit or financial related field. The education background should allow the individual to have skills of analyzing business documents and the financial statements.
Commercial loan officer is highly regarded professional in the lending industry since they act as liaison between the bank or lending institution and the clients. The loan also should be familiar with the various computer applications in banking and interpretation of financial records. Other individual without the necessary experience usually advances in the career from extensive experience in banking (United States. Bureau of Labor Statistics p.110). Sales experience is also a necessity and the loan officer at the junior level will be taken through various sales and marketing training. The commercial loan officer will require being well aware of the financial data analysis and inference. This can be gained through experience in working experience in a financial institution. This allows the loan officer to offer the right advice and also, it allows the use of financial statements to make a sensible conclusion. The loan officer should constantly advance the education, to cover the latest development in the financial sector.
The continued education allows the commercial officers to be more competitive and appealing to the clients. There are many institutions that offer continued education for the loan officers, and it is an individual initiative to continue having the right knowledge and education relevant and helpful to the profession (Boone, & Kurtz p.595). There is a need to boost level of confidence to individual loan officers, by offering the right knowledge that can be used in making financial decisions about the loan offer. The loan officer should be able to create good relationships with clients and bank and should have a high sense of self drive. This is achieved through continued education in the areas of sales and financial emerging trends. Well trained and educated commercial officers are more marketable, and will land good jobs in large organizations. Improving the education and training allows for promotion and the job retention for these loan officers. Some institutions such as private business schools and Bank Administration Institute, which is owned by American Bankers Association, offers continued education like Loan Review Certificate program (Boone, & Kurtz p.596). Loan officers, who work with credit unions and banks, do not require licensing, however, those who work at mortgage banks and brokerage companies should receive the relevant licenses.
Loan officers receive licensing from different institutions and depening on the country, place of engagement and the legal requirements. I...