Credit Administration Leadership in Uncertain Times
by Phil Love, Pactola President/CEO
CAP Senior Member

Pactola is hosting a free webinar on Credit Management in the COVID-19 Virus on Thursday, March 26 at 10:30 CDT (9:30 MDT). The focus will be on ideas for reaching out to your borrowers during this challenging time. To attend, go to The dial-in number is 863-208-0120 and the attendee pin is 243 7669#.

The COVID-19 virus situation has created a huge challenge for us, but this has also presented an opportunity we would not see in normal times for true leadership in our communities. I imagine by now you are beginning to see the large impact this virus is having on your membership and it is probable that this impact will only be compounded within a few weeks. It is important to realize that there are also the additional issues of low oil and a bear market in most commodities which are creating additional stress to your communities. 

The tendency for many of us whenever such large negative events are hitting unexpectedly, is to hunker down and hide. But this does not provide your communities what is needed. Now is the time to rise up and lead. The folks you serve in your financial institution are looking for help and a crisis provides a wonderful opportunity to deepen your relationship with them. You must lead even though you don’t know the true condition of the crisis (no one does), you don’t have 100% certainty of what the proper action is to ease your member’s pain (no one does), or you don’t understand how long the crisis will continue (again, no one does). 

The COVID-19 crisis is serious, and I write this not to diminish the seriousness. But think of what we have gone through in the past twenty years: first we had Y2K; then 9/11; next Anthrax; West Nile Virus; SARS; E-coli; Ebola; the 2008 financial crisis; Swine-flu; the 2012 end of the world from the Mayan Calendar; Isis; and the Zika Virus, just to mention a few. Then I would throw in the various hurricanes, droughts, blizzards, and tornadoes. Crisis is part of our human condition. 

It is important at this time to create traction during the crisis, instead of being distracted and going into a hole. To create some positive action in your shop I would suggest the following.

First, divide up your business and ag portfolio into thirds or fourths by those that you think are most severely impacted down to those least influenced. Consider Tier 1 entities which could be a hotel, restaurant, or non-essential retail. But also think about entities which are not directly impacted but those which will have their revenues impacted from a Tier 1 customer. An example here is the owner of the retail strip center which has had some stores and restaurants close from the virus. Also, consider geography in your list. If you have a community or area that has had an outbreak, there could be more negative impact among businesses in those places. 

Then contact those on the most critical list and ask how they are getting along during this crisis.  Once you find out who needs help, you can provide real help for them. Some of these actions could be:

  • Pointing them to disaster loans with the SBA for up to $2MM of low interest loans for cash flow needs. Send them to
  • Update financials from the company and guarantors. Have them put together a revised operational budget that lines up with the new paradigm. If you are making payment concessions, consider going to monthly reporting where necessary.
  • Consider payment relief on their loans. If you have loans with a government guarantee on it, then make sure you follow the guidelines of that program. Some options may be to go to interest only, forbear payments for up to 6 months, require the borrower seek out and provide proof they are looking for relief in various federal and state programs.
  • Keep updated with what is happening with the news and any changes to relief from the government that could help your borrower. 
  • Encourage them to rethink their plans for the current economy, but remember this must be their plan. We are seeing distilleries change to make hand sanitizer, auto companies working on respirator production, and businesses who required workers to be in the office, learn to function remotely at home. 

Today is a time for you to exercise leadership in helping your membership through the present situation. A crisis is a time the real leaders show up. You were made for this! I hope that you will have time to attend our webinar on Thursday. And remember, if you need help, contact us.


Pactola is a CUAD CAP Senior Member and a subsidiary of Midwest Business Solutions. We are a Credit Union Service Organization that is dedicated to commercial and agricultural lending and serving multiple credit unions and banks throughout the United States with our services. We help our partners increase their earning assets and profitability. By doing so, we help them become a relevant financial force in their community increasing social good through helping businesses and farmers. Visit our website to learn more. You can contact Phil Love, Pactola CEO at or 605.223.5154.


<< Go to Memo List