February 25, 2024
Lender and Partner — Securing Business Financing in Challenging Markets

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Lender and Partner — Securing Business Financing in Challenging Markets

Florida is a snapshot of a strong economy. The state’s daily influx of about 1,000 new residents and businesses seeking its business-, regulatory- and tax-friendly regimes are bringing income migration of roughly $4.5 million per hour. Ranking first in startups and business diversity, the Sunshine State is a resilient place to launch or grow a business.

Meanwhile, the economic headwinds of 11 interest rate increases during this economic cycle and continued rising inflation leave some small- to medium-sized businesses looking to borrow for growth facing rising capital and borrowing costs.

Whether for short-term needs, such as cash or treasury management, or long-term needs, such as loans for equipment, property or other acquisitions, securing business financing in the current marketplace may raise more tough questions than easy answers.

How can a business borrower navigate the current market to capitalize on effective borrowing? In short, who can they turn to for guidance or borrowing?

The answer should start with a conversation. Smart borrowers are turning to their financial advisors and banking partner to explore the choices and implications related to rising capital costs, and potential alternatives designed to keep those costs in check.

How can your organization capitalize on the current market?

  • Conduct a business process review to navigate liquidity challenges. In short, watch your cash flow. It’s more critical than ever to maximize collections while reducing expenditures. Your advisor can review your AP and AR to improve operational procedures or implement processes that can help to unlock working capital and boost efficiencies to make your money work for you. This can mean splitting up payables, or accelerating receivables to maximize liquidity. Consider a review of administrative tasks to spot ways to streamline or remove antiquated processes. Engage procurement to renegotiate contracts with vendors to expand working capital. Lender and Partner — Securing Business Financing in Challenging Markets
  • Perform/request a working capital model review. Engage a treasury management consultant to layer a working capital model atop the business process review. This complementary review can provide a 360-degree summary of effective and ineffective processes. If a working capital loan is in order, the consultant can help determine the amount and source, whether a traditional loan or a line of credit for cyclical business needs.
  • Turn to short-term working capital analysis. Clients are seeking more guidance around maximizing working capital, especially short-term, and are partnering with their banking team to analyze current processes and uncover new ways to create efficiencies. A treasury management consultant can help determine solutions best suited to organizational cash flow and processes through working capital analysis. Recommendations will then be customized accordingly. For many, taking steps to free up short-term working capital is a logical solution, because it can keep costs down by only taking on credit destined to be put to work.
  • Take advantage of current conditions. Current interest rates are affecting long-term financing and treasury management activities. However, opportunities still remain for the right borrower facing the right situation. Limit exposure when borrowing and work to keep your rate as low as possible. For larger loans, an interest rate swap may be available to help achieve your goals.
  • Don’t settle for “no.” Some business owners may get frustrated when they receive a denial letter from their existing banker or prospective lender. While some banks are trying to shrink their balance sheet, others are looking to grow relationships. Find those opportunities to partner with new lenders.
  • It’s prime time for resilient businesses. Many businesses are in a prime moment to seize opportunities. Whether for business acquisition, equipment purchases, or real estate, expansion or growth, well-positioned and optimistic businesses see opportunity amid the underlying economic conditions.

Moreover, strive to find a banker or lender who works to understand your objectives while not relying on a canned solution. Especially during challenging times, it’s critical to have a partner — your CPA, your attorney, your banker — that understands your objectives.

With offices throughout Florida, $59 billion in assets and named among the Best Banks in America by Forbes, Synovus Bank helps small- to mid-sized businesses reach their full potential.

Sean Simpson is division CEO for Central and South Florida with Synovus Bank, responsible for the community banking operation, including commercial banking, retail banking and private wealth management.

Aubrey LaBoda is executive director, head of treasury management sales with Synovus Bank. LaBoda’s responsibility spans the bank’s five-state footprint partnering and consulting with clients and prospects to assist with their banking needs.


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