Preparing for Post-Pandemic “New” Normal

Published on April 2, 2021


Watching the economy blossom as we emerge from Covid’s lockdown reminds me of a great quote:

“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.”
– Abraham Lincoln

While we’re in the early days of recovery, it’s not too early for companies and lenders to prepare for a new normal. Here are action steps to get you started:

Management Teams & Boards

  • Stress test your balance sheet against a high-growth scenario. What breaks?
  • Assess your re-staffing plans. Have you communicated with key employees to set their expectations about when and where their job duties resume?
  • Review your capitalization. If you’ve built-up unsupportable levels of debt, start the restructuring and negotiating process today.
  • Understand your top customers’ growth forecasts. If you extended credit terms during the pandemic, establish repayment terms and leverage your support during the bad times to gain advantage against your competition.
  • Weed out unprofitable and slow-paying customers. Increase prices to your unprofitable customers until they change their costly habits, pay or fire you.


  • Stratify your credits by projected risk-ratings.  Clearly communicate concerns and information requests to borrowers that have been slow in providing information and/or are in industries hit hardest by Covid. 
  • Focus your efforts on your strongest customers. They likely will have the greatest borrowing needs and provide you the fastest path to credit approval.
  • Introduce poorly performing credits to your institution’s version of special assets.  Put a strict PIP (performance improvement plan) in place with tight deadlines. The tone of a borrower’s reaction to a direct conversation will likely tell you as much as their financials.
  • Assess your portfolio for risk in the market segments most likely to suffer a Covid hangover. Ask those borrowers for their plans under a worst-case scenario ASAP.

Here’s hoping we chop down our trees with one clean hit.


What are your thoughts on these ideas? Call or email to let me know.

Mike Bergthold


Mike Bergthold, Managing Director
(213) 404-0113


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