Blog   Small Business

July Outlook by the Numbers

  |  Posted by

Do you have questions on the housing market, labor market and interest rates? Check out UMB Investment Management team’s July 2017 Outlook by the Numbers for a quick snapshot on these and other economic drivers.

Also, be sure to review the following articles for more market and wealth management information…

Continue Reading

Follow UMB‡ on LinkedIn to stay informed of the latest economic trends.

 Interested in learning more about our Private Wealth Management division? See what we mean when we say, “Your story is our focus.


UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.



Leave a Comment

Tagged: , , ,

Business Owners: Planning a Roadmap for Success in 2017

  |  Posted by

We are almost halfway through 2017, which means it is an opportune time to revisit business goals set at the beginning of the year. Conducting a mid-year check-in allows business owners to evaluate if goals for the year are being met as projected and whether plans need to be adapted to help optimize future success.

Several questions business owners should ask include:

Continue Reading

Is the business prepared for rising interest rates?  

Rising interest rates and Federal Reserve sentiment are in the news regularly, with the public continuing to watch rates gradually rise after years of stagnation.

With the country steadily rebounding from the recession, the Federal Reserve increased the interest rate for the second time in three months in March 2017 to a range between 0.75 percent and 1.00 percent (most recently they elected to maintain this rate in early May).

Interest rates are important to business owners to consider as they look at items such as loan terms and evaluating leasing versus purchasing for commercial real estate.

Is refinancing a business option?

As rates fluctuate, it is critical to evaluate refinancing options. This could be the time to consolidate debt or secure a better rate for a loan. Refinancing could open the door for a larger purchase later in the year or allow for a different goal to be reached more quickly.

Additionally, refinancing into a fixed rate loan may provide some peace of mind for business owners who are nervous about the impact of rising rates on an existing variable rate loan. A fixed rate offers something that business owners crave – predictability.

Do you have the right product for your needs?

It is also important for business owners to ensure they understand all the aspects of the loan. Take time to research the different terms, and make sure they are still in line with business goals. There are several different financing options available to small businesses, and it might be time to explore a different type of product that better suits the needs of that particular business or the current business environment.

Make a list of business goals, and discuss these options with an experienced banker, as they should be able to help clients prepare and best navigate any economic environment with sound lending advice.

Is it time to make a large purchase?   

Mid-year is the perfect time to evaluate what is needed to help business owners navigate the rest of 2017. Since interest rates are unpredictable and have been on the rise, it is important to understand how a purchase now will impact the business down the road. For example, it might be worth considering owning instead of renting equipment or property.

Real estate is also a key consideration for business owners, as it is often one of the largest expenses they face. Purchasing a space instead of renting could be a better long-term solution, given rents in many cities continue to rise at a pace that makes long-term agreements a less attractive option.

Ultimately, the window for low rates seems to be closing, so moving to a more entrepreneurial mindset and investing through capital expenditures may be beneficial. Bankers can help owners evaluate these options for the short- and long-term.

Be in regular communication with your banker.

Finally, it is critical to maintain regular communication with your banker. Business owners should consistently share what is happening and ask the tough questions to see what changes can be made for the time ahead.

Bankers are here to support owners and to help businesses succeed—having the full picture will result in sound advice and recommendations.

Interested in learning more about UMB Business Banking Solutions? See what we mean when we say, “Grow with Confidence.


Dominic is a executive vice president for the Business Banking division at UMB. He joined UMB in 2013 and has more than 20 years of experience in the financial services industry.



Leave a Comment

Tagged: ,

Focus Items for Small Business Owners

  |  Posted by

In December, the NFIB Small Business Optimism Index‡ had its highest reading in 12 years. In the report seven of the 10 index components rose, including small business owners expecting better business conditions and higher sales.

Optimism is currently at a high point allowing for owners to focus on their next big idea, their bottom line and how they can make things better for their employees. Their bankers should be thinking about those things, too.

If you’re a small business owner, make sure you’re talking with your financial partner about these business-critical items as you venture into 2017 and beyond.

Top Talent Identification and Retention
Companies requiring vocational talent can face challenges finding the right type of employee. As businesses look to expand, growth can be difficult without a sound workforce and could potentially force companies to outsource to other cities or move operations entirely.

As part of their talent acquisition and retention efforts, small businesses should ensure they are offering solid compensation and benefits to build and retain a strong workforce.

Business Growth
With an ultimate goal of growing their company, small businesses need to evaluate what other potential clients exist and if there are new segments where they can introduce their product or service.

Companies that did not survive the 2008 economic downturn left behind certain voids that need to be filled. Existing companies should evaluate this as an opportunity to expand to a new business target.

Continue Reading

Employee compensation and benefits
Currently, there are two big issues that could pose a threat to small businesses: the minimum wage discussion and health care. If minimum wage increases, many businesses will face challenges with revenue and cash flow, particularly if they employ lower-wage workers. With no offsetting revenue increase, this would affect a company’s cash flow and could create unprecedented challenges within the business.

The other topic of note for business owners is healthcare. The rules and regulations of the Affordable Care Act may change with the current administration discussing extensive healthcare reform. This could mean an extra expense without incurring any additional revenue for small businesses.

Fraud and Protection
Fraud continues to be a top concern among business owners, and the latest statistics prove it is a legitimate fear. In the 2016 Association for Financial Professionals Payments Fraud and Control survey, 62 percent of companies were subject to fraud during the survey period, and wire fraud has nearly doubled from 14 percent to 27 percent.

The truth is, businesses can plug one gap and another one opens up somewhere else. The key is to stay vigilant with your employees, train them and understand the latest tactics that are being used to commit fraud.

 

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


Dominic is a executive vice president for the Business Banking division at UMB. He joined UMB in 2013 and has more than 20 years of experience in the financial services industry.



Leave a Comment

Tagged: , ,

UMB: Insights – Financial technology (fintech) startups

  |  Posted by

Fintech (financial technology) startups are a growing trend, but what challenges do these companies face? Find out from our business banking region manager, Dave Bauer, who is working with several of these entrepreneurs.

Don’t miss the other videos in our UMB: Insights series.

Continue Reading

Dave Bauer is a Vice President / Region Manager for UMB Business Banking. He is responsible for leading the Business Banking teams in the St. Louis and Oklahoma City regions. He joined UMB in 2011 and has eight years of experience in the financial services industry.



Leave a Comment

Tagged: , ,

How to finance your dental practice: the most important questions to ask

  |  Posted by

IndustryInsights_blog_555x19

As a dental professional, you’ve probably spent at least eight years in school preparing for your career (12 to 14 if you are a dental surgeon). After that, your focus will be on growing your new practice by building your patient panels and providing quality dental care to the community you serve.

dental practice financing

But what’s next? There are questions you need to ask yourself as soon as you open a practice:

  • Does your practice need remodeling or construction?
  • Do you see yourself bringing on a new partner at some point?
  • And most importantly, are you adequately planning for your retirement?
Continue Reading

As we work with dental practitioners, we’ve noticed a trend within this profession. A lack of strategic borrowing to pay for their practice’s expenses is a leading cause that prevents dental practitioners from retiring when and how they want. Only around 8 percent of dentists are able to retire and maintain the lifestyle they had during their working days.

Dental practitioners face many challenges in today’s market. Those challenges are further motivation to properly manage your funds. An important aspect of your finances is considering the best borrowing practices for your office. Some questions to consider when thinking about a loan for your dental practice:

What are your goals for your practice?
Determine where you see your practice over time. Figure out how quickly you want to grow your practice or if you have aspirations to open multiple locations. Identify a plan and partner with industry professionals who will help you achieve your ultimate objectives. Then discuss with your banking partner what financing structure will help – not hinder – this plan.

Are you borrowing with the best interest of your practice in mind?
Ask your banking partner to explain all loan options so you can align the loan structure to the best interest of the practice.  For example, some loans have a balloon payment at the end, which could require you to pay additional interest. The money you might have to pay in additional interest could be used instead to help expand the practice or could be committed to your retirement.

What are your ramp-up and wind-down strategies?
In addition to determining the long-term growth of your practice (ramp-up), you will also need to eventually consider succession and retirement strategies (wind-down). Have you considered hiring an associate to purchase your practice as a component of your exit strategy? Have you engaged a CPA firm to complete an evaluation of your practice? These are potential issues to consider as part of a succession plan.

Every practice is unique and you might even find that long-term goals change over time. Start planning early and understand what financing options are paramount for your practice. Find a banking partner who will help you determine the best loan options for your practice and your eventual retirement and succession plans.

For more financial advice, take a look at my video on Business Banking for Dentists.

 

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.

 


Dave Bauer is a Vice President / Region Manager for UMB Business Banking. He is responsible for leading the Business Banking teams in the St. Louis and Oklahoma City regions. He joined UMB in 2011 and has eight years of experience in the financial services industry.



Read One Comment

Tagged: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

UMB Insights: Being Bankable

  |  Posted by

What does a bank look for when you’re applying for a small business loan? Here are some insights from a lender’s perspective.

  • Cash flow
  • Liquidity
  • Collateral
  • Character

To learn more about small business loans and SBA loans, check out more on the blog.

Continue Reading

Dominic is a executive vice president for the Business Banking division at UMB. He joined UMB in 2013 and has more than 20 years of experience in the financial services industry.



Leave a Comment

Tagged: , , , , , ,

The ABCs of SBA Loans

  |  Posted by

Small Business Loans explained

UMB SBA loans

A loan from the U.S. Small Business Administration (SBA) could be a very useful option for your company, no matter if you are just getting started or if you have been around for years.

SBA loans often allow business owners who may not normally qualify for conventional commercial loans to obtain financing. This includes those who:

  • have less available cash flow,
  • are more leveraged, or
  • have little to no history in operating their business.

However, it is important to know exactly how an SBA loan differs from other loans, what types of SBA loans are available and what to consider when deciding to apply.

How do SBA loans work?

The SBA actually does not make direct loans to small businesses. Rather, when you apply for an SBA loan, you are actually applying for a commercial loan from a bank or another partner lender, structured according to SBA requirements and backed by an SBA guarantee. (The SBA agrees to pay a certain percentage of the loan if the borrower defaults.)

SBA loan vs. a traditional loan:

  • SBA loans usually have a lower down payment requirement, but higher fees
  • collateral requirements: SBA loans might access equity on a person’s home for collateral, which most traditional loans would not do.
  • SBA loans have longer amortization periods and terms. This can lead to a lower payment for the borrower.

What Types of Loans Are Available?

  • 7(a) loans – the most common offered by the SBA and include a variety of loan programs such as SBA Express and CAPLines
  • 504 loans – used primarily for real estate and equipment purchasing

Considering an SBA Loan

Many aspiring business owners are hesitant to go through the SBA loan process. The application process and associated costs seem too daunting. We recommend visiting an SBA Small Business Development Center or SBA’s website to learn more about loan options available and qualifications. These centers can work with applicants not only on loan options, but also can provide resources for business planning.

If an SBA loan seems to be a fit, we recommend working with a banker that is experienced in SBA lending and can help expedite the application process, as well as evaluate all other loan options.

 

Continue Reading

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


Dominic is a executive vice president for the Business Banking division at UMB. He joined UMB in 2013 and has more than 20 years of experience in the financial services industry.



Leave a Comment

Tagged: , , , , , ,

How to take advantage of your banking partner

  |  Posted by

Is your bank helping you make money?

Optimism is on the rise among business owners. This is the first year coming out of a down cycle in the economy and businesses are ready to grow. They are looking to expand operations, hire new talent and purchase new equipment. But they are also searching for new strategies, financing options and ideas for better market penetration. In today’s economy, one of the best partners a business can have is their banker. Ask yourself if your banker is:

  • bringing more to the table than monthly reports or the weekly “how’s it going” call
  • strategizing with business owners on how to expand operations, create more efficiencies and generate more revenue
  • understanding every aspect of a business, from cash flow to risk management and payroll to IT services.

Continue reading below to find out more on this topic.

Continue Reading

Here are a few areas bankers can help businesses strategically grow and profit in today’s economy.

How Does Your Cash Flow?

Most business owners talk about the importance of cash flow, but not many go deep into the process and determine how to make it better. Businesses need to ask questions such as: How many days does it take to collect on receivables? How long are you paying on collectables? Are you getting discounts for paying early?

A lot of companies are operating inefficiently.  They are duplicating internal steps or making extra steps to receive money. It costs $2 to $5 to mail a check, whereas sending an Automated Clearing House (ACH) payment costs less than $1. Businesses need to review how much time it takes to print, stuff and mail a check versus using a card or ACH payment.

By working closely with a banker, businesses can gain cash flow relief and create better efficiencies in their operations. Bankers also can help business owners create a profitable and logical cash flow system.

Risk Management and Efficiency

Risk management is exactly what it sounds like. Anything businesses can do to manage risk will ultimately benefit their bottom line. This includes having dual controls with employees, doing regular inventory checks, having different people sign off on checks and having a process to detect and deter internal and external fraud. So much risk can be diverted simply by paying attention to the small, everyday details.

Risk efficiency is something bankers also should discuss with businesses as it relates to items such as outsourcing payroll or return collections. Often times there are functions that businesses can outsource to save time and money. One of the main things to be outsourced is payroll. A payroll provider can help save a company time and money. They may also accept tax liability so the employer isn’t responsible for tax penalties.

For companies with large receivables, it may be more efficient to have a lockbox or outsourced collection system. Bankers can greatly reduce time and efforts for clients that have high receivables. Another area to outsource is IT. Businesses can outsource their IT needs to a third-party group in order to save time, headaches and money.

Creating Operational Efficiencies

Bankers understand cash and business cycles. They can help a business create operational efficiencies in several areas, including payments, cash flow cycles, commercial cards, reconciliation and so on.

One example is the process of purchasing equipment. As businesses expand their work, make repairs or replace units, they may find themselves making multiple purchases throughout the year. Rather than go through the process of taking out a separate loan for each investment, companies should map out their anticipated needs for the year and take out a line that will cover all potential investments. Not only will this save time, but it also provides flexibility to buy new or used equipment and to proactively plan for capital expenditures they may want to make during the year.

Purchasing cards are another item to consider from a processing standpoint. Not only does the right program provide valuable rewards, but it also cuts down on check writing and provides increased flexibility in cash flow. Additionally, it creates a more streamlined tracking system for accounting departments. By allowing job numbers to be attached to specific expenses, companies can easily allocate costs to the appropriate projects, which results in more effective planning and budgeting.

By working closely with a banker, businesses truly have the opportunity to expand and grow through creating efficiencies in areas they never knew could be improved. Any operational, cash or risk management improvement will ultimately improve a company’s bottom line and their outlook for future growth opportunities.


Mr. Bibens is a treasury management officer for UMB’s Commercial Deposits department. He is responsible for providing consultative technology and cash flow management solutions to companies and public entities throughout the Greater Missouri area. He joined UMB in 2010 and has 10 years of experience in the financial services industry.



Leave a Comment

Tagged: , , , , , ,

Business Banking for Dentists

  |  Posted by

IndustryInsights_blog_555x19
Should new dentists purchase their first home or buy their practice? Watch to find out our recommendation and some pitfalls to avoid when financing a dental practice.

Continue Reading

Dave Bauer is a Vice President / Region Manager for UMB Business Banking. He is responsible for leading the Business Banking teams in the St. Louis and Oklahoma City regions. He joined UMB in 2011 and has eight years of experience in the financial services industry.



Leave a Comment

Tagged: , , , , , ,

Community banks are the lifeblood of their communities

  |  Posted by

There has been much discussion and debate recently about the role of community banking in America.  In fact, I read with interest a recent article in the Wall Street Journal, “Tally of U.S. Banks Sinks to Record Low,” which compelled me to write this blog post reaffirming our support of these banks.

The article points out that the number of banks has dramatically decreased to 6,891 as of September 30, 2013. The reasons for this decline are varied.

Continue Reading

On one side there are changing demographics, and the challenges smaller, more rural communities face while simultaneously trying to prosper. Not to mention the impact of rapidly changing technology and accelerating costs.

On the other side, persistently low interest rates and a difficult regulatory environment have made the business of banking more challenging. Clearly interest rates will return to a more “normal” level at some point, and our hope is that regulators find proper balance as we move forward.

So, you may be wondering, what does this all mean for the banking industry? Opinions have varied greatly as to whether a reduction in the number of banks is a positive or negative trend. There also have been various viewpoints on the impact it could have for community banks, given the large number represented in the decline. This in particular is the point I would like to address.

UMB has been offering Correspondent Banking services since 1928, and we currently work with more than 1,000 community banks. Because of our relationships and experience in this area, we know firsthand the value they provide and the part they play in not only our industry, but in their communities as well.

We understand the critical banking and financial needs community banks address within their communities, and we are firm in our convictions that the community banking model works. Our company has always been an advocate for community banks that serve their local communities, businesses and citizens, often providing services larger banks are frequently unwilling to extend.

We know that banks are the lifeblood of their communities. As such, having community banks solidly positioned with the services required to fulfill their mission of growing and supporting their communities is crucial to the long-term economic health and vitality of their communities. It is also essential for the future of banking—and we will continue to be here to support community banks in their endeavors.


UMB Financial Corporation (Nasdaq: UMBF) is a diversified financial holding company headquartered in Kansas City, Mo., offering complete banking services, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska, Arizona and Texas, as well as two national specialty-lending businesses. Subsidiaries of the holding company include companies that offer services to mutual funds and alternative-investment entities and registered investment advisors that offer equity and fixed income strategies to institutions and individual investors.



Leave a Comment

Tagged: , , ,

Page 1 of 212