Vancouver alternative lender adjusts his business to an unexpected health crisis
At a time when concerns over the spread of COVID-19 are starting to paralyze broad sections of the economy, Vancouver-based alternative lender Neighbourhood Holdings is not letting a little thing like a pandemic disrupt operations.
For starters, CEO Taylor Little noted that his business was more than healthy before COVID-19 showed up, and he has yet to see evidence of fissures in his financial wellness.
“Our portfolio is performing very, very well,” he said. “We wouldn't expect to see any major changes at this point. We have yet to see massive amounts of unemployment or business failure which would lead to loan default. But it's a situation where monitoring obviously very carefully and we are the process of starting a new committee to make sure we're vigilant. We are monitoring the portfolio and identifying and potential changes through the data that we have.”
But that’s not to say it is business as usual at Neighbourhood Holdings. For starters, the headquarters office is much less populated nowadays.
“We have a really robust work from home policy,” Little continued. “We have started requiring people to work remote. To the extent some people need to be in the office, we are making sure there's not more than just a few in the office at any given time.”
Little acknowledged that he would prefer not having to take this precaution, stating that wants “to see people in the office – I like working together and I love our team. But we have a lot of team members who do work from home, either on a regular or ad hoc basis. So, when it came time to move the whole office remote, it was a pretty easy transition for us, other than the fact that people like working together and it is hard to do that when you're working remote. We've got really good communication channels daily check in video conferencing.”
The telecommuting set-up is not putting a crimp on Neighbourhood Holdings’ customer outreach, with Little reporting that his company is “still operating business as usual in terms of existing commitments. We are still closing deals – we funded a number of deals today – and we're still committing on new deals.” Nonetheless, some unexpected hiccups are in need of being addressed.
“There are a few things that we've identified today that need some consideration, such as closing mechanics,” he continued. “If we are using a solicitor that isn't in their office, how are they going to accommodate signatures? We are making sure that our service providers also have good sort of remote work environments, including electronic signatures, will be interesting.”
Little also pointed out working with appraisers will be an issue to address, especially since that profession is supposed to be out and about in the field. However, Little noted that “some appraisal groups have already implemented plans to adapt to COVID restrictions” and he is monitoring how that aspect of the origination process will play out.
But how long can this situation work for Little?
“Well, that that's probably the billion-dollar question,” he remarked, predicting that the end of the crisis is predicated on stopping the virus’ spread and the government keeping a proactive strategy to ensure economic viability. “We're not in an underlying credit crisis. Today, we're in a scenario that's much closer to 9/11. We have to be able to absorb the shock and keep things moving.”
