In a May 12 article on cpapracticeadvisor.com, ”Small businesses continue to open and rebuild,” Eric Groves, Alignable’s CEO and Co-Founder, says he appreciates “that wonderful can-do attitude entrepreneurs are known for” and feels that “with the ongoing support of their communities, many small business owners will eventually recover and create their new normal.” That optimism is tempered by a somewhat less optimistic closing: “At this point, it’s difficult to estimate how quickly the recovery will occur and where it will happen first, but a full recovery could take at least a few years.” While it’s true that our small businesses can only recover with the support of their communities, it’s going to take more than community support for businesses to recover. It’s going to take the support of their financial institutions. Is recovery up to the public? In part. But, for the most part, it’s up to you, the banker.
Small businesses are in a tough spot. They can’t wait “a few years.” According to the National Federation of Independent Business (NFIB), as of March 30, “about half of small employers surveyed said that they can survive for no more than two months, and about one-third believe they can remain operational for 3-6 months.” That clock continues to tick. So, as a financial institution, how can you help your small business customers begin to fast track their recovery?
First, the obvious, which everyone has been talking about non-stop for the last three months: Be there for your customers. The small business owners who bank with you rely on you. Make sure they know that you’re there for them.
Second, be armed with tangible solutions. Banks are creating and offering online resources via their websites and webinars, that can assist small business owners in navigating what will very hopefully soon be a post covid-19 business environment. Early on, banks and associations such as the Missouri Bankers Association, and Citizens Bank of Edmond with their participation in PPP.Bank, stepped up to offer guidance to small businesses, via websites and conference calls, on how to navigate the Paycheck Protection Program loan application and forgiveness processes. Now that we’re moving beyond PPP, what message should these institutions be putting out to their small business customers?
Financial institutions might take a page out of the Kansas City SourceLink playbook. The organization is dedicated to “connecting entrepreneurs to resources, coaches, funding, and education” and invites small business owners to explore their programs… resources that cover topics such as cash flow, cash management, and disaster relief funds. The site offers links to small business resources, such as the Missouri SBDC, Kansas SBDC, Women’s Business Center, Small Business Owners’ Guide to the CARES Act, and SCORE.
SCORE (Service Core of Retired Executives), by many accounts, is a resource that banks should recommend to their small business customers who are in need of guidance. Business News Daily lists the eight factors that lenders consider when making small business loans. Among credit, business plan, and cash flow, lenders also consider whether or not the applicant has sought expert advice. “When you apply for a business loan, lenders want to see that you've sought guidance from knowledgeable advisors. Accountants can be an important source of advice for small business owners, according to Stephen Sheinbaum, CEO of Circadian Funding ‘but there are many other places to find good people to talk to, such as SCORE, a free mentoring service that is supported by the Small Business Administration.’
In partnership with the Small Business Administration (SBA), SCORE offers small businesses access to mentors who can offer guidance and resources as you look to build—or rebuild—your business after the crisis. Remote mentoring services are available, along with free webinars that address coronavirus-specific issues.
So, what can banks be telling their small business owners right now? Here are some steps your customers should be taking right now with a view toward recovery:
- Assess the damage by looking hard at P/L and cash flow statements
- Re-evaluate their business plan
- Research any and all state and federally mandated lending and assistance programs
- Research other sources of funding such as SBA 7 (a) loans and lines of credit
- Plan for what could be a very long recovery and, most importantly,
- Seek professional guidance
Of course, that primary source of “professional guidance” is you, their banker. It goes back to what we said earlier: Be there for your customers. The small business owners who bank with you rely on you. Make sure they know that you’re there for them. The fact is, while we’d all like to believe that the worst is behind us, it may not be and it’s important that your small business customers be prepared – as best they can be – for whatever the future holds.
For more information on how BankMarketingCenter.com can help you with communicating vital information to your customers – for example, with our ads focused on rebuilding small businesses – visit bankmarketingcenter.com. Or, you can contact me directly by phone at 678-528-6688 or at firstname.lastname@example.org. As always, I would love to hear your thoughts on this subject.