It has power, a lot of power. It can drive you mad or fill you with joy. Some will spend their lives chasing it. Others will waste it on a whim. But either way, you can’t escape it.
What is this force that I speak of?
Money, of course.
Yep, you can’t deny the fact that we all need money and that it controls a decent portion of our lives.
So what is it like to work with it—to be in charge of giving it or keeping it? How does one even go about making a decision like that?
That’s exactly what we wanted to find out, so we spoke with Risk Assessment Manager Nathan Hill about his career journey and what it’s like working in finance, analyzing the numbers, and determining whether or not a deal should go through.
What a typical day is like for a risk assessment manager:
Most of the time Nate’s day consists of generally analyzing various businesses for proposed loans. This involves looking at their financial statements and tax returns (generally over a three-year period plus an interim period) and doing an analysis to see if they have enough cash flow to service the new proposed loan payment.
Nate’s favorite part of being a risk assessment manager is “spreading the deal.” This is the real analysis part of the job, getting down into the numbers. To “spread the deal,” you look over a business’s financials for multiple years and line them up next to each other. When you have all of the numbers in front of you like that, you can start looking for any oddities, anything that you might need an explanation for. You’re looking for trends. If revenue is increasing, you want to figure out if that will continue. If it’s decreasing, you want to try to figure out why that’s happening. The same with expenses. Why have expenses gone up?
Once this is done, Nate has to send the loan to be approved. This involves writing up a loan underwriting summary. In this summary is information about the purpose of the loan, the structure of the loan (the amount of the loan, interest rate, terms of the loan, and estimated monthly payment for the customer), and the repayment sources.
What are the challenges that come along with this job?
Though the job doesn’t involve a lot of interaction with other people, you do have to be able to communicate and work with people who may have a different perspective than you do. For example, Nate is part of a third-party underwriting company that works with 60 different credit unions. This means that he is dealing with the Business Development Officers (BDO) at those credit unions.
Inevitably, there are times when his opinion on the lender or the loan options will differ from that of the BDO that he is working with.
How he became a risk assessment manager:
There wasn’t necessarily an aha “this is my calling” moment for Nate. He was getting married and needed a full-time job and one that provided benefits. At that time, he had a friend who (unknown to Nate at the time) was neighbors with the CEO of a small credit union that did consumer loans.
So his friend referred him, and the next thing he knew, he was getting a call for an interview. [Editor’s note: Remember, when job searching, it’s incredibly helpful to have a connection within the company. See if you can find a way to connect with employees of the company you’re interested in.]
At the credit union, Nate was doing consumer loans—car loans, credit cards, etc. It wasn’t necessarily anything he thought he would do for the rest of his life, but as he went through college, he found himself continuing on in this industry.
After working at the credit union, Nate went on to be a financial analyst for a public storage company. He assisted them in obtaining loans on their storage property. That’s where he really learned to spread and look at deals, to understand what was really needed to show a company’s ability to repay a loan.
Now, at his current position as a risk assessment manager, he’s on the other side of things, the lender versus the consumer.
His experience on the consumer side helps him adopt the perspective of the customer. The storage facility was a large company and a lot of the loans they took out were big. Working with such a sophisticated borrower really allowed Nate to gain insight into loans and helps him understand the customers he’s dealing with.
What students can do to set themselves apart in this industry:
Make sure you get a sound understanding of accounting principles. What you’re doing mostly is looking over financial statements, so it’s important to understand how those statements are built and what they mean. Becoming skilled in creating and understanding these documents can really help to set you apart.
Nate received his undergraduate degree from the University of Phoenix in business accounting and his MBA from the same university. So, the majority of his classes were based in accounting and prepared him to look over and analyze financial statements.
But you can’t solely focus on the numbers side of things. Writing skills are also extremely important in this industry. A large part of credit analysis is being able to put your thoughts and the number analysis into a narrative that other people can understand. You’re pointing out the strengths and weaknesses of a deal and so you want to be able to compose a comprehensive note so that everyone can have a clear picture of the deal.
Another way to set yourself apart is by developing your people skills. As he mentioned before, this has been one of the most challenging parts of his job. But Nate has worked to feel more comfortable communicating with others within his profession.
Going on a mission with his church actually helped Nate to develop these skills since he was required to speak with strangers on a daily basis. This was good practice for communicating with BDOs and other people in his profession.
Homework time! As Nate mentions, it’s important to be strong and confident in your accounting skills. Make sure that you’re taking classes that adequately challenge you in this area. Also, remember that it’s easier to get a job if you know someone at the company or in the industry. See if you can find someone to talk to and make sure you meet them with enthusiasm and good questions.
Also, challenge yourself to develop your communication skills. Take a composition class to help you learn to compose a narrative clearly and effectively. Take an improv class, volunteer to help promote an on-campus club, or see if your church (or any other organization you’re a part of) has something like Nate’s mission where you’ll be required to speak with strangers. Get out of your comfort zone and develop those people skills! You might even try out this technique.