Navigating the pandemic and post-pandemic environment has been about adaptation and being nimble. Achieving stability during this unprecedented time of uncertainty and transition — particularly in remote working environments — has set the tone for new business practices when it comes to securing financing.
GBC’s chief credit officer Mark Stoeberl shared key learnings over the past year, his observations on financing trends and tips on what credit leaders should be doing to prepare for and navigate a post-pandemic environment.
As Chief Credit Officer, Mark leads an experienced team in managing risk and credit policy while keeping a focus on enhancing client relationships. He is a seasoned commercial lender with over 30 years of experience in asset based lending.
What lessons have you and the credit team learned this past year? What positive changes have you put in place in your credit practices and processes since the start of the Pandemic?
We have learned that strong communication practices are key — regardless of the circumstance. The GBC credit team has been hyper-diligent about over communicating with our employees, borrowers, key stakeholders and lending partners to ensure we are continually and proactively addressing everyone’s needs.
How has remote diligence impacted business? How do you expect this to change Post-COVID?
The pandemic certainly forced us to adapt our due diligence process to be more flexible in terms of field audits and the types of diligence that typically require being in person. Coming out of the pandemic, we plan on evaluating opportunities where we can conduct more diligence activities in a remote setting to save time and expenses for everyone involved. This is particularly true for situations where the credit risk or financial situation warrants more flexibility.
There are, of course, circumstances where it’s beneficial to observe operations, ask questions, assess management or exchange vital information in person. We plan on finding a balance between how we manage in-person and remote diligence meetings moving forward.
What trends are you seeing within your portfolio that might be a sign of things to come? What positive trends are you seeing, and what challenges do you foresee existing ahead?
Our clients’ sales volume is picking back up again, which is a great trend to see. It’s good to see the economy coming to life again. To that same extent, there are some supply chain and logistical challenges our borrowers are facing as companies deal with pandemic-related bottlenecks in the supply chain and product sourcing. This is particularly true for companies that do business with overseas suppliers.
We are also seeing price increases in all segments of raw materials. Then, of course, there’s the challenges of companies hiring new people. All of this collectively is hindering some companies’ ability to take full advantage of growth opportunities in the rebounding economy. We are watching these challenges closely to fully support our partners.
Learning from your pandemic experience, what advice would you have for other ABL lenders on how to maintain a positive, productive credit team amid challenging environments?
Communication is a key fundamental element as I mentioned earlier. I would also place an extra emphasis on employee engagement practices. As the pandemic continued, we missed out on the camaraderie of an in-person experience. This can have an impact on energy levels. To counteract this, we put extra energy into virtual team events and communications to keep everyone connected. We provided flexibility as needed and kept an eye on employee morale to ensure everyone on our team was fully supported.
What should other credit leaders be doing now to prepare for the post-COVID environment — or the next 12 months?
Regardless of the financial environment, we’re always re-assessing our processes and procedures. We’re constantly fine-tuning our strategies to proactively manage credit risk while creating a strategic path for growth opportunities.
Now, looking toward a post-COVID environment, we’re taking the opportunity to enhance our processes and improve overall efficiency. Credit leaders should always be refining their processes and procedures to ensure they are properly set up to support their clients as they navigate any type of financial situation.
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