OSB’s SBA Financing Helps Small Businesses Adjust to Market Changes

Michelle Brasseur, an OSB Community Bank Senior Commercial Lender, tells how the flexibility of  SBA loans can provide financing relief to small businesses.

“There are so many fantastic advantages for businesses who access SBA financing solutions through a local community bank. Early in my lending career SBA was the primary loan product that I worked with, but for the past 18 years I would say that SBA, and specifically SBA 7A, is one of the loan products that I would consider when structuring loans for clients.

This year I discovered an amazing servicing opportunity that was truly a lifesaver for one of our clients at OSB Community Bank. As a family owned business in an industry that has been experiencing declining sales and margins, this client was facing financial challenges. The stress of these conditions was showing on the client’s income statement and balance sheet. When our client requested additional financing, we had to explain that what they really needed to do was reduce expenses to align with the reduction in their current and projected sales. We encouraged them to work with their accountant to see what expenses they could reduce.

Soon after, the client came back to me with solutions to significantly reduce their expenses, showing their commitment to making the changes necessary for their survival. As a result, the bank felt comfortable looking at what financing options we could offer to them. After doing some research, I discovered that you can extend the maturity of any SBA loan up to 10 years. Doing this allowed us to provide payment relief to our client, whose business continues to do well today.”

OSB’s Flexible Financing Creates Opportunity for Small Businesses

Ted Schork, Vice President, Commercial Banking at OSB shares how our community banking philosophy has helped one local business succeed.

“A key benefit of community banking for small businesses is our willingness and ability to be flexible in the financing solutions we offer. I was recently reminded of this when OSB had the opportunity to serve one of our long-term, residential mortgage clients who also operates a small, family-owned business which has been part of our community for more than twenty years.

The business is co-owned by a father and his son and daughter-in-law. It provides excavating, logging and trucking services. Earlier this year, one of the company’s main customers indicated that two of its other subcontractors would no longer be providing trucking services due to their retirement. This customer needed to find another subcontractor to take on the additional work and contracts. They offered this opportunity to our client.

To be able to capitalize on this opportunity, the client needed to purchase another semi-truck, a trailer and logging equipment for their business. They approached our commercial lending team with their financing needs and the desire to keep as much of their current cash position as possible for working capital. Typically, a loan requires using a good portion of cash as equity or a down payment. Instead, OSB worked with this client to utilize the equity in their other vehicles and equipment to structure a loan that met their needs.

Creativity and flexibility in OSB’s approach to commercial lending helped to create a “win-win” situation and the ability to honor our commitment of serving our clients for the long haul.”

Behind Every Successful Business Loan is a Great Customer Relationship

In celebration of National Small Business Week,our commercial lending team is sharing how OSB helps local small business owners find flexible financing so they can take advantage of new growth opportunities. John Spiedel, Senior Vice President of Commercial Lending at OSB shares his thoughts below.

“While many banks focus on solely the dollars and cents of a commercial loan transaction, at OSB we look beyond the numbers to learn about the amazing people who have a real passion for building our community.

True community bankers are intensely focused on their community, but they also recognize that a community is defined by people—not just by lines on a map. A perfect example of this philosophy in action is the relationship that OSB has formed with a mid-1980’s University of Michigan alumna who lives in California and has an extremely successful consulting business there. Even though she lives far away, she has always stayed connected to her hometown, Ann Arbor, including making investments in student rental properties in the city.

Recently, this customer decided to purchase additional student rental properties in Ann Arbor, but none of the other “local” banks wanted to lend to someone living outside of Michigan. She was referred to OSB by another local business owner (who has since become our customer as well). Instead of dismissing her request on a geographic basis, we looked deeper, taking the time to learn about her goals and to understand her keen business sense and conservative, disciplined nature. We also noted that she flew in each month to visit each of her Michigan investments in person. She was hardly an absentee owner, which made her an even better potential customer.

By working to understand not only the financial situation but the person behind the numbers as well, we saw that this scenario held not only manageable risk, but a great potential customer relationship. Her investments in property renovations have been carried out by local workers using materials bought locally. This customer’s satisfaction with OSB’s small business loans and our way of doing business is evident in her willingness to recommend us to her many other Ann Arbor business contacts. This is proof that behind every successful business loan is a great customer relationship.”

Why Community Banks are Different…in a Good Way!

All banks are the same, right? They’ve all got tellers and lenders, they cash checks and write loans, they have ATMs. They all do the same things, because they’re all the same—or are they?

It’s a fact: Community banks are different. Different…in a good way. For example, community banks do more than just cash checks:

They’re helping businesses grow.

U.S. Small Business Administration statistics show that small firms employ just over half of the private-sector workforce and created nearly two-thirds of nation’s net new jobs over the past decade and a half. Community banks are natural partners to small businesses because they understand them so well and are committed to their success. As such, the funding, expertise and opportunities small businesses receive from community banks helps them grow and keeps dollars in our community – making it an even greater place to live

They’re creating jobs.

Community banks employ more than 700,000 Americans across more than 52,000 locations nationwide, according to Independent Community Bankers of America (ICBA). In addition to their own employees, community banks help create employment locally by improving the economic infrastructure of the communities they serve and enabling businesses to get the financing they need to grow and add more employment opportunities.

They’re supporting the local economy.

ICBA statistics also show that community banks fund nearly 60% of small business loans under $1 million – reinvesting their deposit dollars back into their community. As a small business themselves, community banks are passionate about ensuring that the communities they share are thriving.

They’re helping local farmers.

Consistently the largest provider of agricultural credit, community banks provide $57 billion in agricultural loans (ICBA data). This comprises more than 70% of commercial agricultural loans in America.

They’re doing more than writing checks.

Communities banks, like OSB Community Bank (OSB) give back to the communities they serve, providing financial and in-kind support to organizations in their communities. Reinvesting back into the community is a central part of the community banking philosophy. OSB employees volunteer many hours to local community organizations – serving on boards for Hospice of Lenawee, Kiwanis, Cascades Humane Society, Jackson Enterprise and many more. Plus, our team is always ready to get involved in community events that foster stronger relationships.

They’re here for the long haul.

A community bank isn’t just another bank. Community banks are different and making a difference to the businesses, individuals and communities they serve. They strive to develop long-term relationships and are committed to supporting the local community through employment, reinvestment and volunteerism. Despite the uncertainty facing other financial institutions community banks are here for the long haul, so you can feel confident that working with (or for) a community bank is a decision you can feel good about over the long-term.

OSB’s Business Manager Can Help Your Business Accelerate Cash Flow

Businesses of all sizes need to have access to working capital in order to operate and grow. OSB Business Manager makes it easy for businesses to increase their cash flow by providing much-needed working capital for your receivables. By bridging the gap between your payables due now and the receivables your customers won’t remit for 30 days or more, our Business Manager program positions your company to leverage growth opportunities, offer extended credit terms, take advantage of supplier discounts, and reduce debt.

OSB’s unique Business Manager program allows your business to operate with confidence and receive cash deposits in its operating account every time an invoice is submitted, giving you quick access to the money you are owed—regardless of whether you receive payment in 30, 60, or 90 days.

By using OSB’s Business Manager your cash flow will be accelerated, so you don’t have to worry about having funds available to make payroll, staff appropriately, purchase new equipment, upgrade technology or meeting other needs related to growing your business or seizing new growth opportunities. You will also be able to take advantage of potential vendor discounts for upfront or cash payment, volume purchases, and timely payments.

Business Manager is Different from Invoice Factoring
While you may have heard of, or even used a program that sounds somewhat similar to Business Manager (perhaps something that may have been referenced as “invoice factoring”), be assured that this service is very different—and provides significantly more benefits to your business in terms of lower costs, flexibility, and the ability to maintain direct contact you’re your clients. There are additional benefits that make Business Manager a better alternative for most businesses including:

  • Lower fixed costs and no additional fees or APR financing charges.
  • Acceptance of invoices with longer payment terms.
  • More frequent funding (daily vs. weekly)
  • No intermediary to deal with—you work directly with OSB.
  • No long term contracts or cancellation penalties.
  • Maintenance of your client relationships and retention of the collection process stays with your business—your customers never deal with us, just you.
  • Your business retains billing ownership—only the remittance address changes to that of the bank.

Business Manager Works for Businesses of All Sizes in a Diverse Range of Industries OSB’s Business Manager program is designed to meet the needs of businesses in a wide range of industries, all with their own unique needs.

Here’s an example of how the program supports the day-to-day operations and growth of one type of business: A mid-size trucking company that wants to leverage new market opportunities but has limited working capital to support its growth. With the Business Manager program as a debt free receivables financing solution, the company can access higher line limits and higher advance rates. This benefits the business by accelerating its cash flow, allowing it to add additional trucks and take on additional contracts without worrying about the extra working capital needed to cover the increased payroll and fuel expense. As a result, the business has increased sales by 300 percent in two months and continues to pursue additional growth opportunities.

Position Your Business for the Future with Help from OSB’s Business Manager Program

More information about Business Manager can be found online. Our business banking team is also happy to answer any questions you may have about using our Business Manager program to help your business access needed working capital and take advantage of future growth opportunities. Contact us today.