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All Hands 2021 Award Winners

All Hands 2021 Award Winners

2021 Award Winners

Congratulations to these Associates for their recent award at the FocusCFO All Hands meeting.

Client for Life Award

Gold Level

Tom Flynn

Area President, Central Ohio

David Green

CFO, Central Ohio

Jeff Lacy

Area President, Central Ohio

Pat Lang

CFO, Central Ohio

Client for Life Award

Bronze Level

Mike Derringer

Area President, Central Ohio

Joe Dougherty

CFO, Central Ohio

Peter Geise

CFO, Central Ohio

Greg Gens

Area President, Northern Ohio

Jim Gilbride

Area President, Northern Ohio

David Gouttiere

CFO, Northern Ohio

Jeff Lacy

Area President, Central Ohio

Scott Lee

CFO, Central Ohio

Sherif Matar

CFO, Central Ohio

Jim McKinney

CFO, Central Ohio

Todd Peter

CFO, Northern Ohio

Jeff Semple

Area President, Northern Ohio

Skip Vermilya

CFO, Northern Ohio

Todd Whetstone

CFO, Northern Ohio

Lynette Zody

CFO, Central Ohio

CFO Hall of Fame

Gold Level

CURRENT MEMBERS

David Bourke

Director, CFO Services

Bruce Collen

CFO, Central Ohio

Pat Lang

CFO, Central Ohio

Lynnette Zody

CFO, Central Ohio

CFO Hall of Fame

Silver Level

NEW MEMBERS

Joe Dougherty

CFO, Central Ohio

CURRENT MEMBERS

Dan Bloom

CFO, Central Ohio

Don Cain

CFO, Central Ohio

Jim McKinney

CFO, Central Ohio

Jim Zins

CFO, Central Ohio

CFO Hall of Fame

Bronze Level

NEW MEMBERS

Scott Lee

CFO, Central Ohio

Walter Himmelman

CFO, Northern Ohio

Scott Davis

CFO, Southwest Ohio

Richard Murch

CFO, Central Ohio

Ric Butler

CFO, Central Ohio

CURRENT MEMBERS

Wendy Brugmann

CFO, Northern Ohio

Will Cooper

CFO, Central Ohio

Dean Cole

CFO, Central Ohio

Kathleen Ferry

CFO, Northern Ohio

David Gouttiere

CFO, Northern Ohio

David Green

CFO, Central Ohio

Sherif Matar

CFO, Central Ohio

Todd Peter

CFO, Northern Ohio

Jim Rowlands

CFO, Northern Ohio

Bob Stecki

CFO, Central Ohio

Skip Vermilya

CFO, Northern Ohio

Area President Awards

Rookie of the Year

Michael Stier

Area President, Carolinas

Area President Awards

Rising Star

Lesli Matukaitis

Area President, Michigan 

Mitch Willis

Area President, Pennsylvania

Area President Hall of Fame

Gold Level

NEW MEMBERS

Jim Gilbride

Area President, Central Ohio

CURRENT MEMBERS

Mike Derringer

Area President,
Central Ohio

Tom Flynn

Area President,
Central Ohio

Jeff Lacy

Area President,
Central Ohio

Jeff Semple

Area President,
Northern Ohio

Area President Hall of Fame

Silver Level

NEW MEMBERS

Bob Miller

Area President, Central Ohio

Darren Cherry

Area President, Central Ohio

CURRENT MEMBERS

Forest Bookman

Area President,
Northern Ohio

Fred Dannhauser

Area President,
Northern Ohio

Peter Geise

Area President,
Northern Ohio

Area President Hall of Fame

Bronze Level

NEW MEMBERS

Bob McAdams

Area President,
Central Ohio

Jeff Farrington

Area President,
Michigan

CURRENT MEMBERS

Bob Miller

Area President,
Central Ohio

Greg Gens

Area President,
Northern Ohio

2020 Continuous Learning Award

Exit Planning Institute – CEPA

NEW MEMBERS

Kim Cooper

CFO, Carolinas

Mark Clower

Area President, Southwest Ohio

Michael Stier

Area President, Carolinas

Randy Feger

CFO, Pennsylvania

Mike Derringer

Area President, Central Ohio

Greg Gens

Area President, Northern Ohio

David Green

CFO, Central Ohio

Lesli Matukaitis

Area President, Michigan

Jeff Farrington

Area President, Michigan

Tom Bartos

Area President, Pennsylvania

Forest Bookman

Area President, Northern Ohio

Bob Palmerton

CFO, Michigan

Mark Rust

CFO, Pennsylvania

Peter Geise

Area President, Northern Ohio

VETERANS

David Bourke

Director,
CFO Services

Darren Cherry

Area President,
Central Ohio

Mark Clower

Area President,
Southwest Ohio

Kathleen Ferry

Area President,
Northern Ohio

Tom Flynn

Area President,
Central Ohio

Jim Gilbride

Area President,
Northern Ohio

Brad Martyn

Visionary and Founder
FocusCFO

Jeff Semple

Area President,
Northern Ohio

FocusCFO Logo 2021

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Debt Covenants

Debt Covenants

Loan Covenants – Challenges and Options to Consider

By Tom Bartos

A common concern with business loans is covenant compliance. Does my business loan have covenants and if so, what are the compliance requirements? Smaller loans under $100,000 may not require collateral, and are usually free of any covenants, but as businesses grow, so do their financing needs. Business owners looking to borrow over $500,000 can expect the loan agreement to contain some type of covenants or compliance requirements. The covenants typically are either financial, operating, reporting or restrictive in nature. Examples of each are maintaining a minimum cash flow to debt ratio (financial), carrying a minimum level of insurance (operating), submitting financial statements to the lender (reporting), and limiting dividends or payments to shareholders or owners (restrictive).

The covenants are in effect while the loan agreement is in place, and require compliance to be reported to the lender on a quarterly, semi-annual, or annual basis. They provide lenders certain financial and business protections in addition to their rights to the collateral, plus provide information regarding any possible adverse changes in the borrower’s financial condition. In other words, covenants provide an additional security blanket for the lender and serve as an early indicator of possible financial issues on the horizon.

Covenants are written as affirmative actions or negative requirements. Affirmative and negative covenants take on many forms. Affirmative covenants require the company to adhere to certain predefined promises, rules, or regulations. These covenants are written into the loan agreement for the benefit of the lenders, shareholders, and other stakeholders. Examples include requiring the company to maintain certain levels of insurance or paying all taxes on time. Negative covenants restrict a company from engaging in certain activities, such as restricting the payment of dividends to shareholders while the debt is outstanding, or purchasing an unrelated business.

 

What are Your Options?

A business owner has to live with the terms of the loan agreement while the loan is outstanding, therefore it is best to determine the company’s future or forecasted ability to comply with the covenants prior to the agreement’s execution. Forward looking projections are important to avoid a potential covenant default and an uncomfortable discussion with the lender at a later date. If a business owner is uncertain as to future compliance with any of the covenants prior to closing, the issue should be discussed and negotiated with the lender beforehand.

Another negotiating topic with the lender surrounding the covenants is the potential for avoiding or removing personal guarantees. Small businesses can have personal guarantees, if present in the agreement, removed after a period of covenant compliance, or avoid personal guarantees with tighter covenants.

 

 

Dealing with Compliance Challenges

If a business finds itself in a covenant violation, the borrow may have a cure period to rectify the violation, if it can be corrected. A cure period for covenant violations will be specified in the loan agreement. Not all covenant violations can be cured or can be cured within the time specified in the loan agreement, so it is best to proactively monitor covenant compliance throughout the year. As is the case with covenants, the ability and time frame to cure defaults can be negotiated into the loan agreement before it is finalized. In the unfortunate instance where a covenant default cannot be avoided, the borrower should notify the lender in accordance with the notice provisions in the loan agreement. The lender may grant a waiver, effectively stating that the lender will not take any actions as a result of the default for a period of time. If the lender does not grant a waiver, their actions can include increasing the interest rates, accelerating the maturity of the loan, or calling the loan to be due immediately.

When entering into loan negotiations with a lender, it is best to obtain advice and assistance from experienced advisers such as a CFO and a good corporate attorney who is experienced in negotiating bank transactions. These professionals will act as a team by adding value in the negotiations, helping everyone understand the various terms and conditions of the agreement, including the covenant provisions, and assist in the loan agreement’s ongoing compliance. Upfront planning, timely compliance, and having the right people and reporting systems in place can avoid covenant compliance issues in the future.

 

Tom is an Area President for FocusCFO based in Pittsburgh, PA.

FocusCFO Logo 2021

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