What Is a Credit Business Associate (CBA)?

The Credit Business Associate (CBA) designation is sponsored by the National Association of Credit Management (NACM) and targeted toward individuals who want a career in credit management. The designation shows that the holder has mastery in financial statement analysis, basic financial accounting, and business credit principles.

Key Takeaways

  • Credit Business Associate (CBA) is a designation offered by the National Association of Credit Management.
  • The CBA designation is targeted towards individuals pursuing a career in credit management and focuses on three main areas: financial statement analysis, basic financial accounting, and business credit principles.
  • To obtain the CBA designation, an individual must complete the CBA exam and required coursework.
  • The required coursework consists of basic financial accounting, financial statement analysis, and business credit principles.
  • The exam is three hours long and consists of between 120 to 125 true/false and multiple-choice questions, all weighted equally, with a passing grade of 70% needed.
  • The National Association of Credit Management (NACM) also lists specific textbooks with corresponding chapters that it recommends one should study before sitting the exam.

Understanding a Credit Business Associate (CBA)

Credit management is a function of a company's risk management practices that is responsible for evaluating the risk of extending credit to businesses and individuals. Credit analysts evaluate financial statements, legal documents, accounting records, and other information to determine the risk posed by lending to a business or individual.

Credit analysts also determine how much credit should be extended to an entity if they determine any credit should be extended at all. The job requires a significant amount of knowledge that covers different areas in finance and accounting.

The Credit Business Associate (CBA) designation helps prepare individuals for jobs in the credit field and validates mastery in the field. To receive the Credit Business Associate designation, applicants must sit for an exam.

There is no minimum work experience required to earn this designation; most of the coursework needed is through self-study, nationally sponsored programs, local NACM affiliated programs, and colleges.

NACM also provides a variety of other credit-related designations, such as Certified Credit Executive (CCE) and Credit Business Fellow (CBF).

Applying for the Credit Business Associate (CBA) Designation

  1. Register for NACM's Education Department by sending the appropriate form along with the fee of $175 for NACM members and $350 for non-members.
  2. Submit the CBA Designation application with the $235 fee for NACM members or $470 fee for non-members. Course grades should be submitted here as well.
  3. Include your updated resume.
  4. Submit your official college transcripts, which must be sent directly from your college.

Credit Business Associate (CBA) Exam

Qualified applicants are invited to sit a three-hour exam, which is offered three times per year at local NACM affiliated offices or annually at NACM’s Credit Congress. The exam typically consists of between 125 and 150 true/false and multiple-choice questions which are weighted equally.

Applicants may need to prepare financial statements, such as a "balance sheet, an income statement, a cash flow statement, or common size analysis (vertical or horizontal)." The exam does not permit textbooks or notes. Calculators are allowed. To pass, candidates must earn a minimum score of 70%. NACM offers a practice exam on its website that has similar questions to the actual exam.

NACM recommends working through the following texts for exam preparation:

  • "Principles of Business Credit," by NACM
  • "Accounting," by Warren, Reeve, and Duchac
  • "Understanding Financial Statements," by Lyn Fraser
  • "Credit Management: Principles and Practices," by Dr. Charles Gahala

Credit Business Associate Required (CBA) Courses

CBA applicants are required to complete three courses as part of the program. These are Basic Financial Accounting, Financial Statement Analysis 1, and Business Credit Principles. The NACM recommends that the Basic Financial Accounting course is completed before the Financial Statement Analysis course to allow applicants to build on their knowledge as they progress. Most of these courses can be completed by successfully completing one of the following:

  • One full semester or two quarters of the same topic at college
  • Undertaking NACM-National’s relevant online course
  • The NACM certification course, when offered at NACM’s national headquarters
  • Through a local NACM affiliated sponsored course