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STEVENS Engineers & Constructors Testimonial

STEVENS Engineers & Constructors Testimonial

STEVENS Engineers & Constructors Testimonial 

Testimonial by Vicky Anderson, CEO, STEVENS Engineers & Constructors
February 2021

“My team and I have over 90 years combined experience and have managed our way through many difficult situations that our company has been faced with over the years. However, 2020 and all that came with it, presented unchartered territory in which we recognized we needed additional resources to navigate successfully.

Fortunately, we were referred to FocusCFO as a potential resource and the rest is history. Greg Gens walked in, assessed the situation and never left until the situation was resolved.

We learned a lot from Greg and Richard Burns and are very grateful for the support and guidance they provided during our unprecedented situation. We now know where to turn when we need assistance in the future and we highly recommend FocusCFO.”

Vicky Anderson, CEO, Stevens Engineers & Construction, Middleburg Hts., OH

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Changes to Business Banking

Changes to Business Banking

Get Ready for a Change
in Business Banking

by Greg Gens

I know it is hard to digest all the uncertainty that we must deal with in our personal lives and at our workplace. But small and medium sized business (SME) owners are going to get another “surprise” soon. More than likely their bank’s credit process and credit outlook are going to be changing, and not favorably.

First and Second Waves

In a rapid economic downturn, bad news comes at SMEs in three waves. The First Wave is the direct impact on your business. With COVID this could mean that you or your team become ill or the state deems that your business is “non-essential” and shuts down your office, restaurant, hotel, or hair salon. Next comes the Second Wave, which is the impact on your customers and vendors and their supply chain. The Pandemic may have left you be but, if your main customer is in office building maintenance you might have to change your business plan. If you cannot get raw materials because of international sourcing, you can not make the sale. We have already experienced these issues. They are painfully obvious to many business owners right now. If you are a business owner, hopefully you have weathered these storms and figured out how to make money under current conditions. Or maybe a PPP Loan or other government program has given you the liquidity to dodge the bullet up to now.

Third Wave 

So now we come to the Third Wave of economic impact. If you are a business in debt (or in need of it), that money is not going to be as easy to find as it has been for the last 11 years. Why? Banks are risk adverse, (no news there) and they should be. US banks lend out money at some of the lowest rates in the world. To do that successfully they have to be fairly certain they are going to get paid back, so they keep careful track of their portfolio of loans. And even if they were inclined to take more risk, there are bank regulations that keep them from stretching too far.

Bank Risk 

The bank is basically looking at two different kinds of risk – the specific risks attached to your company and the general risk inherent in the composition of their loan portfolio. The specific risk of your company’s financial health is straight forward. If your business has a bad financial event, say a large customer goes bankrupt, when the economy and (presumably) the bank’s loan portfolio are good – they have flexibility on how to work with you. They can look at the strength of the continuing business and consider your plan to get back on your feet over time. You probably failed some loan covenants, but the bank will consider waiving them, because the rest of their overall portfolio is not significantly impacted by your bankrupt customer.

When the issue is a broad general risk to the economy, the bank is in a much weaker position and therefore less likely to be able to help. Their entire loan portfolio is in question. This general risk can be summed up in one word – Uncertainty. Uncertainty in their loan portfolio, forces a cautious banker to look twice before taking any risk. And ANY new loan or loan renewal has risk. Additionally, the current economic facts are not good. Also, to make things seem worse we have just finished an exceptionally good 11-year economic run where the growing economy hid any issues that optimistic credit might allow. Getting loans from banks was easier than average. 

Timing is Everything 

It has been eight months since we started dealing with COVID, what has changed that would make the banks start tightening this November? The answer is the timing of typical bank information requests. Many banks require their clients with loans to send in financial information and in some cases meet certain requirements or “covenants” on a quarterly basis. For companies with a 12/31 calendar year end the last such quarterly deadline was 9/30/20. The banks typically give their customers 30 to 45 days to get their quarterly information in for review.

For the third calendar quarter that deadline is occurring over the next few weeks. This third quarter is the first quarter in the pandemic where there was not a significant government bailout. If these reports bring bad news, as many believe, the banks will be faced with a deteriorating loan portfolio, increasing their risk, forcing them to shore up their required cash reserves and reducing their ability to loan money. The very uncertain nature of the COVID pandemic on the economy makes it worse. We have never experienced this before, so there is no road map to look at to see what happened last time. 

So, What Does That Mean to Us? 

It means that your next loan renewal is probably not going to be rubber stamped. The bank is probably going to be asking a lot more questions about things they have not pursued in years. If they have issues in their portfolio surrounding an industry, they might not be interested in renewing any business in that industry regardless of how well the company is performing. Some banks will back off offering loans to new customers until “things shake out”. Obviously, this makes it harder to find a new bank if your current bank does not renew your loan. It is lining up to look like a tough time to be looking for a business loan. 

So, What Can a Business Owner do About It? 

First, let me say that every bank is different and your relationship with the bank might be fine. What I am emphasizing is that you should not assume everything is OK because of the past. The rules may have changed at your bank, get in front of any issues you might have.

  • Talk to your bank and ask where they stand in general and in your industry.
  • Read your loan documents and see where you sit with any covenants that you are required to make. These documents are the “rules” and you should understand them.
  • Come up with a plan for your “new normal” and put it into a projection. If it does not work on paper – it probably will not work at all. Make sure that plan shows the bank that you care about paying them back. Communicate your plan to the bank. Reducing the specific risk around your business helps the bank reduce its uncertainty.
  • Do not assume that you can continue to take money out of the business for distributions, high salaries, or new assets in excess of what the plan shows you need. Cash is king when things are tight and your bank will not look kindly upon use of loan proceeds for things they were not intended for as stated in the loan documents.
  • If you need help, seek out a trusted financial professional familiar with lending.

As always, if you are proactive and have a plan you are more likely to be successful. Understand that the general economy may have a big impact on your bank relationship. So, control what can.

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All Hands 2020 Award Winners

All Hands 2020 Award Winners

2020 Award Winners

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

Client for Life Award

Gold Level

David Bourke

Leadership and Support Team
Director, CFO Services

Tom Flynn

Central and Eastern Ohio
Area President

Client for Life Award

Silver Level

Don Cain

Central and Eastern Ohio
CFO

Pat Lang

Central and Eastern Ohio
CFO

Tom Flynn

Central and Eastern Ohio
Area President

Jim Zins

Central and Eastern Ohio
CFO

Jeff Lacy

Central and Eastern Ohio
CFO

Lynnette Zody

Central and Eastern Ohio
CFO

Client for Life Award

Bronze Level

Dan Bloom

Central and Eastern Ohio
CFO

Forest Bookman

Northern Ohio
Area President

Darren Cherry

Central and Eastern Ohio
Area President

Mike Derringer

Central and Eastern Ohio
Area President

Kathleen Ferry

Northern Ohio
CFO

Tom Flynn

Central and Eastern Ohio
Area President

David Green

Central and Eastern Ohio
CFO

Jeff Lacy

Central and Eastern Ohio
Area President

Pat Lang

Central and Eastern Ohio
CFO

Jim McKinney

Central and Eastern Ohio
CFO

Lyle Rhodebeck

Central and Eastern Ohio
CFO

Jim Rowlands

Northern Ohio
CFO

Jeff Semple

Northern Ohio
Area President

Bob Stecki

Central and Eastern Ohio
CFO

Jim Zins

Central and Eastern Ohio
CFO

CFO Hall of Fame

Gold Level

CURRENT MEMBERS

Lynnette Zody

Central and Eastern Ohio
CFO

Bruce Collen

Central and Eastern Ohio
CFO

NEW MEMBERS

Pat Lang

Central and Eastern Ohio
CFO

David Bourke

Leadership and Support Team
Director, CFO Services

CFO Hall of Fame

Silver Level

CURRENT MEMBERS

Jim Zins

Central and Eastern Ohio
CFO

Dan Bloom

Central and Eastern Ohio
CFO

NEW MEMBERS

Jim McKinney

Central and Eastern Ohio
CFO

Don Cain

Central and Eastern Ohio
CFO

CFO Hall of Fame

Bronze Level

CURRENT MEMBERS

Wendy Brugmann

Northern Ohio
CFO

Joe Dougherty

Central and Eastern Ohio
CFO

Skip Vermilya

Northern Ohio
CFO

Sherif Matar

Central and Eastern Ohio
CFO

Jim Rowlands

Northern Ohio
CFO

Kathleen Ferry

Northern Ohio
CFO

NEW MEMBERS

David Gouttiere

Northern Ohio
CFO

Will Cooper

Central and Eastern Ohio
CFO

Dean Cole

Central and Eastern Ohio
CFO

Todd Peter

Northern Ohio
CFO

David Green

Central and Eastern Ohio
CFO

Bob Stecki

Central and Eastern Ohio
CFO

Area President Awards

Rookie of the Year

David Tramontana

Southwest Ohio
Area President

Area President Awards

Rising Star

Darren Cherry

Central and Eastern Ohio
Area President

Bob Miller

Central and Eastern Ohio
Area President

Area President Hall of Fame

Gold Level

CURRENT MEMBERS

Tom Flynn

Central and Eastern Ohio
Area President

Mike Derringer

Central and Eastern Ohio
Area President

Jeff Lacy

Central and Eastern Ohio
CFO

NEW MEMBERS

Jeff Semple

Northern Ohio
Area President

Area President Hall of Fame

Silver Level

CURRENT MEMBERS

Jim Gilbride

Northern Ohio
Area President

NEW MEMBERS

Forest Bookman

Northern Ohio
Area President


Fred Dannhauser

Northern Ohio
CFO


Peter Geise

Northern Ohio
CFO

Area President Hall of Fame

Bronze Level

CURRENT MEMBERS

NEW MEMBERS

Bob Miller

Central and Eastern Ohio
Area President

Darren Cherry

Central and Eastern Ohio
Area President

Jim Collins

Southwest Ohio
Area President

Greg Gens

Northern Ohio
Area President

2020 Continuous Learning Award Exit Planning Institute – CEPA

VETERANS

Kathleen Ferry

Northern Ohio
Area President

Tom Flynn

Central and Eastern Ohio
Area President

Darren Cherry

Central and Eastern Ohio
Area President

NEW MEMBERS

David Bourke

Leadership and Support Team
Director, CFO Services

Jim Gilbride

Northern Ohio
Area President

Jeff Semple

Northern Ohio
Area President

Brad Martyn

Leadership and Support Team
Visionary and Founder

Mark Clower

Southwest Ohio
Area President

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