Middle Market Businesses
Your Commercial Banking Business Partner
In the COVID-19 era, keeping in touch and staying connected is a challenge for all of us — both in our personal and business lives. However, by applying technology and ingenuity, we can find ways, and the payoff is enormous.
If you are a business owner or financial executive, one person you don’t want to lose touch with in the current economic environment is your local banker.
As a banker serving area businesses for many years, I’ve seen the value executives derive from meeting regularly with their bank relationship manager. It gives them an opportunity to outline their organization’s goals and vision, as well as the obstacles they’re facing, and for the banker to report trends, offer new ideas and suggest financial solutions based on broad experience.
So don’t let the evolving work environment interfere with the regular cadence of discussions with your banker. Meet by phone. Schedule a video conference call. As local health guidelines permit, meet up for coffee/lunch or book a tee time. Do what you can to keep the lines of communication open. Your business will benefit.
More than ever before, your banker can be an indispensable resource as you grapple with the pace of change and adapt to a host of new challenges.
Securing financing during an uncertain economic environment. With some area banks responding to the economic downturn by tightening access to credit, make sure you are working with a bank that remains philosophically “open for business.” You want to give your banker the chance to roll up his or her sleeves and come up with a loan structure that will work for you. Maintaining a regular dialogue enables that process and is an essential part of cultivating a solid relationship with your banker.
Also, look to your banker to educate you about the wide range of financing possibilities beyond traditional lines of credit — ranging from asset-based borrowing to raising funds in the capital markets.
Keeping financing costs low. Organizations have an opportunity to potentially reduce their cost of capital by locking in historically low interest rates through a variety of interest rate protection strategies. Bankers can introduce you to hedging experts at their institutions who can help you execute solutions such as swaps, caps, and collars.
Selling or expanding your business. Recent changes in the economy have many owners considering selling their businesses or raising capital through a partial sale, while others are looking to buy businesses and build their companies opportunistically. Partnering with a bank that has investment bankers with relevant experience optimizes outcomes for business owners. Your banker can be a sounding board for M&A strategies and help walk you down this path with expert assistance.
Future-proofing the payables operation. Many companies were unprepared when the pandemic forced accounts payable staff to work from home, making check issuance problematic. Your banker can help you explore solutions to build up accounts payable resilience and improve your working capital cycle, including check outsourcing, electronic payment options such as Automated Clearing House (ACH) transactions and commercial cards, and integrated payables automation.
Meeting growing customer demand for contactless payment options. The pandemic has also placed a higher priority on meeting customers’ desire for contactless payment options that address both issues of convenience and health. Your banker can describe opportunities for integrating emerging digital options — such as electronic invoicing and digital payment network alternatives — into your accounts receivable process.
Building up your fraud defenses. Scams like business email compromise are on the rise as criminals seek to take advantage of the growing remote workforce. Your banker can explain simple defensive strategies and payment security solutions.
These are just a few of the many financial challenges we’ve been discussing with clients. Making time to meet with your banker about these and other timely topics can contribute greatly to propelling your business forward.
During these uncertain times, most of us are finding creative ways to stay in touch with parents and relatives, with neighbors and friends, and with colleagues, customers and suppliers. We’re doing that because those relationships are vitally important.
So is the one with your banker. Be sure to stay connected.