
President and CEO
Context Business Lending
The past 12 months have illustrated just how uncertain the future can be. If we rewind back to December of 2019, commercial lenders were expecting a very different year in 2020 than they ended up getting. The ongoing disruption of the COVID-19 pandemic was not on most lenders’ radars, but it completely altered the trajectory of the industry and the world at large.
CARTER: 2020 brought an opportunity for our industry to truly save American jobs by providing otherwise unavailable capital in situations where companies, through no fault of their own, struggled to meet payroll because of the effects of COVID-19.

Chief Operating Officer
Siena Lending Group
MARDAGA: Like most industries, 2020 has been an ever-changing series of events, opportunities and challenges for asset-based lending.
CARTER: While we miss seeing our industry colleagues in person, we think the virtual environment necessitated by COVID-19 provided opportunities for us to meet a broader base of referral partners efficiently. Our virtual environment also fast-tracked our focus on creating internal efficiencies for scale through technology.

CEO, Asset-Based Lending
PNC
MARDAGA: It was incredibly striking to see the entire industry — lenders, employees, clients and third-party professionals — quickly adapt to the necessities of the moment. The year began with preparing employees to work remotely, then rapidly morphed into aiding clients both directly and through the Paycheck Protection Program. In addition, we all had to determine the best way to run our businesses with a dispersed employee base for a long period of time with the realization that the pandemic was going to persist much longer than originally thought.
What trends, COVID-19 influenced or otherwise, do you think really stood out this year and which ones do you think will continue in 2021?
Head of Asset-Based Lending
BMO Harris Bank
MARDAGA: The broader acceptance and leveraging of technology became necessary and, in particular, through parts of our industry which were previously resistant to adoption. Now there is little discussion about returning to prior ways, which will make customer interactions much more seamless and efficient. Remote working will likely also continue to be a trend in 2021 but not at the levels we see now. Ultimately, we all still need human interaction and the benefits of in-person development that an office environment provides.
What are your expectations for 2021 in terms of deal flow and business activity?
CHEN: I expect a strong 2021, especially after the first quarter. However, this is also strongly dependent on what the government does between now and then with any stimulus monies.
SCOLARO: I am anticipating a significant increase in deal flow beginning in the February to March time frame and a more gradual increase in business activity in the second half of 2021 as the vaccines lead to herd immunity and the population’s subsequent re-engagement with certain parts of the economy that have been left behind by the pandemic, primarily in the hospitality and entertainment industries.
CARTER: As we seek to become the leader in “new school ABL,” we have committed significant capital to discover and implement more efficient ways to run our business through incorporating technology and to source more deals using external data sources. Being a leader in this frontier means forging a path on the road less traveled and comes with learning curves and trial and error. But we are prepared to take risks, make mistakes and learn from those mistakes in order to achieve our goal to “disrupt ABL.”
MARDAGA: We recently announced a definitive agreement to acquire BBVA USA, so our team will be working through that process throughout much of 2021. As an added complexity, our team will also be transitioning to a gradual return to the office. Our employees have had to deal with many challenges during 2020 and have had to make adjustments to their personal lives to accommodate work, among other things. They will now have to make new adjustments as the situation evolves over the coming months. I worry about the personal impact that will have on our team.
To combat these challenges, we must remain close to our customers and actively solicit new customers all while being cognizant of rapidly shifting market conditions. Further, we need to invest in our employees. We need to reduce unnecessary tasks and complete an end-to-end transformation of the lending process to ensure we are delivering not only world class service to our clients, but a process for employees that is not rife with duplicative, inefficient and frustrating hurdles. We need to continue to listen to our employees and recognize the issues important to them and do our absolute best to help them achieve their goals.
CARTER: We hope that the asset-based lending industry will never fully return to normal. Instead, we hope that a new, more efficient normal will emerge, incorporating more technology into what has been a very static industry for decades. We believe there is a lot of opportunity to bring our industry into the 21st century and CBL hopes to lead that movement.
CHEN: Probably later in Q3/21 when, hopefully, our essential worker and vulnerable population can get the vaccines and people are more confident to go out and start to resume a more pre-COVID routine.
SCOLARO: Asset-based lending has never been normal. Our customers count on us to deliver required financing in all economic cycles at a low cost with a high degree of flexibility. The attractiveness of ABL is verified by the very small percentage of first time ABL issuers that choose to remain in ABL over the long run. As far as the economy, we are anticipating normalcy returning in the third quarter of 2021, and not a moment too soon.