Credit Underwriting Simulation

In this Credit Underwriting Simulation, participants are tasked with evaluating corporate borrowers, making crucial lending decisions, and managing a portfolio of credit exposures in a dynamic, risk-prone market.

Credit Underwriting Simulation Overview

The Credit Underwriting simulation is a dynamic, comprehensive financial simulation developed by experienced credit risk professionals. It replicates the rigor, pressure, and multi-faceted analysis of real-world commercial and corporate lending.

Participants engage in the complete credit cycle: from initial client outreach and financial statement analysis, to structuring the deal, setting covenants, and making a final approve/decline recommendation. They must balance the dual mandate of pursuing profitable lending opportunities while rigorously defending the bank's capital against potential losses. Each round introduces new client cases with varying complexity, industry sectors, and evolving macroeconomic conditions that test their judgment.

This multiplayer simulation emphasizes critical analytical thinking, structured decision-making, and effective communication of risk. Participants are assessed not just on the volume of deals they approve, but on the quality and risk-adjusted profitability of their credit portfolio.

Credit Underwriting Simulation Concepts

Participants work through realistic scenarios, which can be customized to emphasize or exclude specific topics depending on the learning goals. This modular structure allows the simulation to be tailored to any type of session. Key concepts include:

The Five Cs of Credit
Financial Statement Analysis
Cash Flow Analysis
Credit Scoring and Risk Rating
Loan Structuring
Covenants and Documentation
Portfolio Management
Macro-Economic Impact

Gameflow

What Participants Do

In the simulation, participants will:

Analyze detailed company financials, business plans, and industry reports.
Build integrated financial models to forecast performance and debt capacity.
Conduct sensitivity and scenario analysis (base, stress, upside cases).
Structure loan terms, including pricing (spread), covenants, and collateral requirements.
Write concise credit approval memos to recommend or decline the facility.
Defend their underwriting decisions in simulated credit committee meetings.
Monitor existing credits and respond to covenant breaches or borrower requests for amendments.
Rebalance their credit portfolio in response to changing risk environments.

Learning Objectives

By the end of the simulation, participants will be able to:

Systematically apply a structured credit analysis framework to real borrower cases.
Interpret financial statements to identify strengths, weaknesses, and red flags.
Build cash flow forecasts to determine a borrower's ability to service debt.
Structure credit facilities that appropriately balance risk and reward.
Communicate credit decisions clearly and persuasively in written memos and oral presentations.
Understand how regulatory capital requirements influence lending decisions.
Develop professional judgment to make decisions under uncertainty and incomplete information.

How the Credit Underwriting Simulation Works

This simulation can be run individually or in teams in academic or corporate contexts. Each cycle represents a stage of getting through a pressing financial situation.

1. Receive a Client Case Teams are introduced to a potential borrowing company with a specific financing need.

** 2. Conduct Due Diligence** They analyze provided data, including audited financials, management accounts, industry research, and management biographies.

3. Perform Analysis and Modeling Participants calculate key ratios, build financial forecasts, and run stress tests.

4. Make a Credit Decision Teams decide to approve or decline, and if approving, they must fully structure the proposed loan (amount, term, price, covenants).

5. Prepare and Present Participants compile their analysis into a standardized credit approval memo and present their recommendation to a simulated credit committee (which may be an instructor or another team).

6. Review and Reflect Instant, automated feedback from the simulation platform scores the quality of their analysis and decision. Facilitator-led debriefs connect outcomes to core learning points.

Frequently Asked Questions

Who is the credit underwriting simulation designed for? It's ideal for undergraduate finance majors, MBA students, early-career bankers in commercial or corporate banking divisions, and anyone seeking to build or solidify foundational credit analysis skills.
Do participants need prior experience in financial modeling? A basic understanding of accounting and corporate finance is helpful, but not required. The simulation includes instructional videos, templated models, and guides to support all skill levels.
How long does the simulation typically run? The core simulation experience is designed for 4-6 hours of engaged activity. It can be condensed into an intensive workshop or extended over multiple sessions with deeper case studies.
Is this an individual or team-based exercise? It supports both formats effectively. The team-based format encourages collaboration and debate, closely mimicking the real-world dynamic between analysts, associates, and relationship managers.
What types of companies/industries do we analyze? The simulation includes a diverse set of borrower profiles, from small and medium-sized enterprises (SMEs) to larger corporates across sectors like manufacturing, technology, services, and retail.
Can the simulation be customized for our specific training needs? Yes. Facilitators can select specific client cases, adjust the emphasis on certain risk factors (focus more on collateral or on cash flow), and incorporate their own institutional credit policies.
How is performance measured and graded? The simulator provides automated scoring based on the accuracy of financial analysis, the appropriateness of the risk rating assigned, the robustness of the loan structure, and the completeness of the credit memo.
What career paths does this simulation prepare participants for? It provides foundational skills for roles in commercial banking, corporate banking, credit risk management, leveraged finance, and fixed income analysis.

Assessment

Assessment of participant performance can be tailored according to the host institution’s objectives (business school, corporate training, assessment centre). Typical assessment criteria include:

Accuracy and depth of financial analysis and forecasting.
Ability to correctly identify and weigh key risks.
Appropriateness of the credit decision (approve/decline) and loan structure relative to the risk profile.
Clarity, conciseness, and persuasiveness of the written credit memo and any oral presentations.
The risk-adjusted performance of their overall book of credits at the simulation's conclusion.