What is debt financing and what do debt financing analysts do?

Debt financing is when a company borrows money to be paid back at a future date with interest. Debt finance is typically secured against an asset (such as premises or equipment) and may attract debt covenants (restrictions that lenders put on lending agreements to limit the actions of the borrower) to protect the lender in the event that the company is unable to repay the loan.

The role of a debt financing analyst is to balance the commercial goals of the bank or lending institution with the needs and capacity of the borrower. To identify a mutually agreeable solution the analyst will meet the management of the borrower; explore lending solutions, terms and deal structures; understand and analyse repayment models and prepare recommendations for the investment committee. They will also work on the execution of the deal.

Key responsibilities

  • Assisting the debt finance team in finding new clients and managing and tracking the inflow of investment opportunities
  • Conducting meetings with potential clients
  • Drafting financial models from client-provided documentation
  • Conducting debt capacity analysis as well as putting together pitches and proposals and executing them
  • Drafting detailed deal screen memos, including fundamental financial analysis and independent research using a variety of data sources
  • Participating in discussions with senior managers regarding bespoke deal structuring
  • Assisting in the preparation of deal specific presentations for transaction recommendations, communicating the argument effectively; being able to defend position in a team environment, including investment committee meetings
  • Managing the transaction execution process for multiple ongoing deals

Why are they important?

A Debt financing analyst plays a key role in managing risk in the lender institution by providing the bank with data about the credit status of the borrower and building the business case for review by the investment committee. As there are many different kinds of loans or debt securities, their role is also important in helping the borrower to select which option would be the most appropriate for them and they are pivotal in helping to ensure that lending is appropriately structured.

Skills needed for this role

It is essential for debt financing analysts to be able to multi-task and work at a fast pace. They must also have strong research and analytical skills as well as excellent interpersonal skills which allow them to build successful relationships with clients.

Strategic Professional Options examinations linked to this role

Advanced Financial Management

Career opportunities presented by this role

Banks, private equity firms and hedge funds provide excellent careers in debt financing, with the possibility of job prospects internationally. Progression opportunities include senior associate roles and managing investment debt financing teams.


High level competencies required include:

  • Advisory and consultancy

    A. Gathers and understands financial and non-financial information to develop complete knowledge of the client business and the environment in which it operates.

    B. Provides expert advice that will add value to the business and gain advantage.

    C. Identify and advise on business partnering to develop strategic relationships to create opportunities, improve performance and solve business problems.

    D. Prepare and present business plans and advise on the actions to implement these plans.


  • Data, digital and technology

    A. Identifies strategic options to add value, using data and technology.

    B. Analyses and evaluates data using appropriate technologies and tools.

    C. Applies technologies to visualise data clearly and effectively.

    D. Applies scepticism and ethical judgement to the use of data and data technology.


  • Financial management

    A. Links developments in global trade, markets, business practices and the economic environment to required improvements in the financial and risk management of an organisation.

    B. Advises on business asset valuations, capital projects and investments using appropriate analytical qualitative and quantitative techniques.

    C. Identifies, evaluates and advises on alternative sources of business finance and different ways of raising finance.

    D. Communicates and advises on the impact on financial decision making on current developments in regulation, governance and ethics.

    E. Assesses and advises on appropriate strategies to manage business and organisational performance regarding business and finance risk and effectively communicates the impact.



  • Governance, risk and control

    A - Evaluates organisational structures and governance to protect the long-term interests of stakeholders.

    B - Recommends appropriate strategies to ensure adherence to governance structures and application of best practice internal controls.

    C - Identifies and manages risk appropriately.

    D - Uses risk management for the best interests of an organisation and its stakeholders.

    E - Monitors and applies relevant legislation, policies and procedures.