A business person accessing banking information.

Credit availability is critical for the ongoing operations and growth of SMBs. And when it comes to bridging the time between service or product delivery and cash collection or financing the purchase of any material asset, community banking has been the typical and invaluable go-to source of capital. 

The recent “crisis in the US regional banks” and the raising of interest rates and tightening of credit conditions have had meaningful negative impacts on:

  • Credit availability, particularly from the weakened regional and smaller banks whose deposits are more at risk (as well as their overall economic model).
  • Credit pricing – prime is now 8.5%. Even quality borrowers are paying double-digit interest rates.
  • The willingness of lenders and investors to take even measured levels of risk – buying a short-term treasury note yielding almost 5% with no credit risk typically “trumps” a loan involving risk.

How Can You Navigate These Challenged Credit Conditions?

Here are The CEO’s Right Hand’s (TCRH) recommendations for navigating the current stormy conditions in our nation’s banks and capital markets:

  1. Preparation and planning in advance of any funding plan are critical, including thoughtful articulation of the business plan and budget and how it fits and complements an optimized capital structure. Preparedness builds credibility and typically improves the chances of creating optimal outcomes.
  2. Consistent execution against the plan as articulated in 1 just above.
  3. Development of professional and prudent messaging and communications to prospective lenders and capital providers.
  4. Development of a highly tailored “go-to-market” funding strategy inclusive of an array of non-traditional and alternative funding sources.
  5. Comprehensive and dynamic financial analysis to evaluate credit and valuation metrics.

TCRH professionals have extensive experience, real-time market intelligence, and a deep network of capital providers that support its long-standing clients with world-class financial advisory consultative services. We encourage you to reach out to discuss your needs.