As the distribution and availability of the COVID vaccine increases, there is a lot of optimism and hope that much brighter days are ahead. Anyone who owns a business clearly understands how incredibly challenging it has been over the past year. With that in mind, it makes sense for small business owners to take a moment and make sure they are well prepared for the economic recovery, which forecasters tell us is in the works. As a banker, a Nevadan and a strong supporter of our community, I wanted to pass along some advice to help your business prepare for future success. • Place your focus on building cash reserves as much as possible. There are federal, state, city and other programs that provide grants or forgivable loans and debt relief to small businesses. Take advantage of those. • Owners should have a solid handle on their company’s financial footing. That means working with your accountant/bookkeeper to ensure the accuracy of the reporting of your company’s profitability, along with assets and liabilities. You may find incorrect financial reporting or old accounts that need cleaning up or closing out. Updating these statements will ensure they correctly represent your company to potential users, including banks, vendors, or investors. • If indications of pent-up consumer demand are accurate — and we hope they are — you will want your business well-prepared. If you anticipate that you will need financing to purchase additional inventory or expand product lines, now is the time to prepare. Pull your credit report and see if anything needs to be addressed or corrected. Is derogatory credit information (e.g., old trash bill, unresolved disputes) hurting your score? Those factors could impact the interest rates you pay for financing in the future. • Most small businesses have some debt. Now is an excellent time to investigate the interest rate you are currently paying and see if there are better options with lower rates or better loan terms. With an experienced banker and assistance from the Small Business Administration, it may be possible to significantly cut loan costs and preserve additional capital for your business. • The SBA recently announced some significant changes for 7(a) loans. A 7(a) loan is used to purchase commercial real estate, construction and refinancing, business acquisition, equipment purchases, and working capital. The SBA has waived all fees — often as high as 3.75 percent on the guaranteed portion of the loan - on all 7 (a) loans approved before September 30, 2021. Other incentives include principal and interest payment subsidy for three months, paid by the SBA, on many loans approved before September 30, 2021. • Is your business operating with fewer employees as a result of the downturn? Many financial institutions — including mine — offer automation tools that bring new efficiencies to accounting and billing practices and, in the process, make employees more efficient. Other banking tools can eliminate daily deposit trips to the bank or will allow you to accept paperless payments from your customers.
Jim DeVolld is managing director for First Independent Bank in Reno. Reach him for comment at jdevolld@firstindependentnv.com.
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