Commercial Awareness Tips

[Tamoor Javed Barlas]

Hi guys,

In preparation for interviews, what topics should I concentrate on in terms of commercial awareness?

I know Brexit and the US-China Trade War is a good start but what else should I be looking out for?

Many thanks!!

 

[Jaysen]

I’d have an opinion on the regulation of Big Tech - has come up in a few interviews.

 

[Tamoor Javed Barlas]

I’d have an opinion on the regulation of Big Tech - has come up in a few interviews.

Thank you for your help!!!

 

[IntrepidL]

Hi @Jaysen!

I was wondering, with regards to case studies and methods of financing, in which scenarios would companies prefer to pay higher interest rates, as opposed to obtaining secured debt?

 

[jan28]

Hi @Jaysen!

I was wondering, with regards to case studies and methods of financing, in which scenarios would companies prefer to pay higher interest rates, as opposed to obtaining secured debt?

Hey, I'm not completely sure but I think this would depend on the borrower's finances and their goals first. Higher interest rates are applied to short term loans and to loans that aren't that high. This is never an ideal situation for companies but they might also have to agree to it if they're deemed to be a risk by the bank so the high rates compensate for the risk the lender is taking. The company should be comfortable that they'll be able to pay this back. The company might also not have an asset worth acting as a collateral or they don't want to risk losing them.

 

[Jaysen]

Hey, I'm not completely sure but I think this would depend on the borrower's finances and their goals first. Higher interest rates are applied to short term loans and to loans that aren't that high. This is never an ideal situation for companies but they might also have to agree to it if they're deemed to be a risk by the bank so the high rates compensate for the risk the lender is taking. The company should be comfortable that they'll be able to pay this back. The company might also not have an asset worth acting as a collateral or they don't want to risk losing them.

I can't say I'm too clued up on this in practice, but ^ is how I'd answer this in theory. If you're in that position, many would much rather pay a higher interest rate than risk losing possession of an asset if things go wrong (especially if the bank is pushing for something substantial).

 

[Jaysen]

Might also add tech valuations and WeWork's troubles to this list. I haven't heard WeWork come up yet, but I could see it being a great topic to ask in interviews. The decline of high street firms has also come up in the past.