Ensuring Liquidity Amid Economic Volatility- Session 3 [Video]

“Driving Success Through the Pandemic”- Financing Options and Opportunities for Small Businesses During Covid

As COVID-19 cases continue to surge and new restrictions loom, challenges, skepticism and anxiety persist for small business owners. According to the recent Q4 Wells Fargo/Gallup Small Business Index, almost half (46%) of the respondents continued to report decreased revenue in the last 12 months and optimism for the near future remains low. One-third (33%) of survey participants reported that they felt that the economy was continuing to slow. Additionally, 34% of respondents did not anticipate an economic recovery until after 2021.

Amid ongoing stressors and uncertainty, Latinx-owned businesses must continue to seek dynamic and strategic financing to stay afloat. In this episode of Driving Success Through the Pandemic, Popular Bank Chief Operating Officer Manuel Chinea and Latin Biz Today’s advisory board member Elias Mendoza tackle important topics to help small businesses discuss financing and liquidity opportunities to help small businesses navigate risk and scale success.

See key takeaways from the discussion below.

Use your financial institution as a strategic partner.   

As small business owners work to secure financing, information is key. Now is the time to tap your financial institution as an important resource. Your bank or credit union will almost certainly have insights, information, and even access to programs and financing opportunities that can help you during this time. Take time to discuss these options with a relationship manager to identify meaningful solutions that can meet your unique needs.

While your financial institution can be a tremendous support during this time, small business should expect more red tape. In the face of significant disruption, financial institutions will likely also have a more conservative lending approach. To ensure success, entrepreneurs will do well to prepare for more rigorous lending requirements. Come prepared to discuss businesses details, including operations, financials, current business plans, needs and goals. 

“When contacting your financial institution, it’s critical that you come prepared,” said Chinea. “You really need to have a great, great handle on your numbers. You need to understand your operations numbers, your cash flow and you need to have very robust financial reporting when trying to secure financing.”

Know how to articulate your business.

Remember, nobody understands your business better than you. As entrepreneurs seek assistance from financial institutions, government programs or even investors, it is important for them to be able to fully understand and articulate their business needs, vision and current circumstances. No two businesses are the same and not all solutions or partnerships will be good ones. While some businesses will need help extending their runway, others will need help scaling accelerated growth during this time. When asking for assistance, a business plan will be critical in communicating these unique circumstances and needs.

Know the Strategic Partners You Want and Need.

Before pursuing financing and liquidity options, it is important to understand the type of partners that you may want to bring into your business. This is especially true if you are looking to sell equity in your business to an investor. This decision can be a very personal one and requires some thought as to how you would like your partners to engage with you and your business going forward. How involved would you like your partner to be? In addition to financing, your partner may be able to help your business penetrate new markets, develop and introduce new products or introduce new vendors or contacts.

In choosing the right partner, you’ll be able to navigate current challenges or opportunities and strategically plan for long-term growth.

The information mentioned in this article is for informational purposes only, is intended to provide general guidance and does not constitute legal or professional advice. You should seek the advice of a professional advisor and/or legal counsel to address your specific needs regarding the issues related to your situation.  Popular Bank does not make any representations or warranties as to the content contained herein and disclaims any and all liability resulting from any use of or reliance on such content.

Copyright© 2020 Popular Bank. Member FDIC.

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