Pactola's Approach to Training in Business Lending

We are starting our 2017 round of training seminars, and I thought it may be helpful to lay out our methodology for anyone interested in attending our sessions this year.

Business lending is a big bucket that catches several types of loans, and it is important to understand that there is a lot of diversity in business loans just like you have in consumer lending. Consumer lending encompasses home loans, car loans and maybe even unsecured credit cards. You know that each of these loans have different underwriting requirements and different risks as well. You will find that business lending will also have considerable diversity. Just to name a few, we may deal with commercial mortgages, lines of credit, and agricultural loans.

So where to begin with everything? Lucky for you, we try to answer that question by making our first session of the year an introductory course on business lending. We refer to it as “boot camp.” The intent is to help you understand what differentiates business lending from consumer lending. Then we will discuss the different types of loans you will find in business lending, and generally, how you will approach underwriting and servicing. The goal is to get you oriented to understanding this unique field of lending so we can then begin to explore more complex topics. Our Boot Camp will be in Sioux Falls on March 20-21.

As a result of Boot Camp, you will learn we try to put most of our business loans into three big buckets: commercial real estate, commercial and industrial (better known as C&I) type loans such as equipment and lines of credit, and lastly, agricultural loans. We then schedule sessions for the rest of the year to explore these individual categories.

We will be holding our commercial real estate seminar in Minneapolis, MN on May 22-23. We discuss how we model the risk of lending for commercial real estate requests, which includes a look into different commercial real estate types, researching real estate markets, and how we investigate construction and development loans.

Our next session will be C&I lending in Omaha, NE on August 7-8. This seminar is also co-titled “small business” lending, because the principles of C&I lending are the same tools you will need for small business requests, like lines of credit and equipment financing. We dive into assessing financial statements and projections, and how to compare similar businesses to each other.

Last, we have our agricultural forum in Miles City, MT on September 25-26. This differs a bit from our commercial real estate and C&I seminars. We have a standing meeting with a core group of credit unions at this event, and each year we try to address some contemporary issues, explore case studies, or do some refresher exercises. New participants are always welcome to come!

My hope is this information helps you better understand how we have arranged our classes, so you can best make use of what we are offering. And as always, you can always contact me or anyone else at Pactola about any questions or for clarification.