Small Business Owners:

Cash Flow is the Lifeline for Small Businesses in 2009

Lately, all of us are thinking hard about our money, and that includes small businesses who know that the best approach to a successful tomorrow is prudent use of the resources on hand today. From looming balloon notes to the realities of month-to-month budgeting, it’s important for small businesses to know that there are options to increase cash flow and get ahead.

Assess Your Borrowing & Seek Out Better Alternatives

As the Business Development Officer for First Atlantic, I speak to small business owners every day that need more cash on hand, but don’t know that an improved borrowing strategy may be the right solution if you own the property where you do business.

• Think in terms of your bottom line. If your commercial real-estate loan is scheduled to amortize over 20 years, seeking a 30-year amortization will have an immediate positive impact.
• Rate your rate. If you borrowed as recently as the last year, you could be paying up to 7.5%. Converting to a borrowing at a rate of 6% will have an additional direct and immediate impact on your cash flow.
• Evaluate loan-to-value. If you borrowed 70-75% of the value of your commercial property, increasing to 80% will provide an immediate infusion of capital into your business.

What does all of this mean for your small business? Now could be the perfect time to move forward with a new commercial property or condo, refinance an existing commercial mortgage before your balloon note comes due, or even draw out some extra cash while rates are at historic lows.

A better bottom line

With a 30-year amortization alone, consider the potential impact on your monthly budget:

The above doesn’t even take into account more favorable rates compared to what you may be paying now, and all of this translates to an annual savings that goes directly into your pocket.

At First Atlantic, we’re well-capitalized and actively seeking to expand our loan portfolio by offering qualified borrowers attractive solutions that maximize the power of their assets. We also understand that banking is about relationships, which is why we offer advantage banking to your employees, incisive financial advice, and – new for 2009 – Business Interest Checking Accounts that pay you back just for doing your everyday banking.

Paul Bowen is a Business Development Officer for First Atlantic. For 25 years he has been working with small businesses, exclusively in Monmouth and Ocean counties, to identify the right banking solutions for their individual needs. Having watched the small business landscape develop over that time, he has become a seasoned authority in small business lending. To speak with Paul about your business and cash-flow needs, call 732-380-3617 or email paulb@fafcu.com.

This article appeared in the Asbury Park Press on March 2, 2009