Blog #3: Small Business Finance: 2021

So many different scenarios could play out in 2021 that we are certainly heading into unknown times. Business owners should be ready for anything and prepared to act quickly. Now is the time for them to look closely at their cashflow and working capital needs and as business finance professionals we need to prepare for when they do not.

Non-bank small business lenders are in the same boat as their borrowers. They are trying to figure out which businesses have the best chance of surviving and prospering from the ones that do not. Pre-pandemic underwriting standards are being re examined. Lenders will have to become flexible or they will miss opportunities which could very well be coming.

A few business owners will wake up next year to find their bank is no longer able to support them as well as they did in the past, even if it is to take advantage of a new opportunity but certainly not to support a lengthy turnaround. Squeezing further leverage from assets is the quick answer but maintaining cashflow while doing so can be difficult and sometimes harmful and is not always the best solution.

Knowing the options and how and when to use them might make the difference between business success or failure. Having up-to-date financial information available and knowing the right people to call is important. Searching the internet to find a financial partner is simply a bad idea.

2021 is sure to be a chaotic year. Business owners willing to venture into the unknown need to be supported by well-informed business finance professionals like us. We should be speaking with them now and encouraging them to plan and prepare for whatever the future has in store for us.

When contemplating a journey into the unknown it is wise to bring along someone who has been there before. If you are interested in speaking with me further about this or would like a refresher on non-bank sources of business finance, please visit my website to schedule a conversation.