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Navigating a Business Loan: Know the Five C’s of Credit

As a consumer, it’s easy to understand the importance of an excellent credit score should you wish to obtain a loan. As a business owner, however, navigating the world of credit and lending can be much more extensive. In business, especially in a privately-held or family-owned business where the owner or owners are filling many roles, a close, working relationship with a local bank can be essential to a business’ long-term success. “Even if you don’t have a great borrowing need now, it’s still a good idea to establish a solid working relationship with a trusted bank,” explained Maria Hunter, First Bank’s Relationship Manager. “In doing so, you will have already established some good will with the bank, allowing the banker to gain general knowledge of your business. Plus, you’ll already have a proven track record with your bank before ever even applying for a loan.” Applying for the Loan The process of applying for a business loan starts be ...

Four Tips to Ensure a Successful Transition in Leadership

  It can be hard to let go. Whether it’s your own business, or you’ve been entrusted with the responsibility of leading a business, you invest time, energy and so much more to ensure its success. When it’s time to move on, you want to not only make sure the impact of all your hard work carries on after you leave, but also that the transition in leadership is as seamless as possible for all stakeholders involved. At First Bank, succession planning is one of our areas of expertise. With four generations of independent, single-family ownership, we uniquely understand the importance of a smooth transition to ensure the continued viability of any business. We are in the process of rolling out our own leadership transition. In September 2018, we announced CEO Tim Lathe would step down and Shelley Seifert, President, FB Corporation, would take the helm in May of 2019. Since then, we’ve leaned on our 100-plus years of experience to help ensure this importan ...

Know the Ins and Outs of the Appraisal Process When Purchasing Commercial Real Estate

Banks are required to appraise real estate that is taken as collateral to ensure the collateral has sufficient value to cover loans. Federal appraisal regulations guide the majority of this process. One of these requirements is that appraisers should be independent of the loan transaction and, as a result, will provide an unbiased, objective opinion of the property’s value. Jeff Thornhill, Senior Vice President/Director of Real Estate Technical Services and a tenured professional, manages the commercial appraisal process for First Bank. “After a potential business borrower applies to the bank for a commercial loan that is secured by real estate, the bank will request competitive bids from qualified appraisers,” said Thornhill. His department selects who they believe is best suited for the assignment and, once the appraisal is received, it is reviewed to ensure it complies with appraisal standards, appraisal regulations, and that the value is reasonably supported by the data in the report. ...

Family Business: Grooming the Next Generation

The final measure of an organizational leader’s success is not only how well the organization functions after his or her tenure but also throughout their succession process. In other words, did the chief executive officer (CEO) prepare a successor that could continue to grow and advance the organization? In a family business, this is critical for the engine or business that drives the family’s wealth and well-being. Ideally, the next generation includes multiple talented members, actively involved in the business, and committed to its long-term success. The time will come when the critical question is asked, “Which member should be the next CEO?” Often, the answer is apparent, and sometimes multiple family members vie for the position. It’s important to note, however, parents may not always be an objective evaluator of the talents of their children. In fact, a professional, individual assessment should be considered to provide an independent evaluation of strengths and wea ...

Downsides and Challenges to Growth

Typically, growth and expansion are indicators of a healthy business. However, there are typically many misconceptions and a greater story behind those growing businesses. It may be easy to get caught up in others success stories, especially when hearing that someone increased their revenue by 300% or they expanded their workforce to four times the size in the past quarter, for example, but that’s only half the story. Risk is the key element facing every business from the start, but that risk never goes away; it only multiplies. Risk is associated with growth, but it’s how you face the challenges of risk and adjust with growth that plays a key role in your business’s success. Get more information on the downsides and challenges business owners face as their business thrives, as well as advice on adjusting with these shifts: Cash flow management and the growth of reserves. Rick Sems, First Bank Executive Vice President of Commercial Banking, candidly explains that the biggest ele ...

Family-Owned Businesses and Strong Cultures Can Go Hand-in-Hand

When I ask family-owned and other privately-held businesses about their competitive advantages, one of the most common answers I hear is about their ability to create a great environment for employees to thrive. Often, the culture of the organization is described as having a “family feel” in which employees feel closely connected to their colleagues, more engaged, face less turnover, and can be more nimble in how they anticipate and react to their customers’ needs. So, how do successful family-owned and other privately-held businesses create great cultures? By playing to their strengths. Such businesses may not have the resources available at larger organizations to help them develop a strong culture, such as large human resource departments to maximize team engagement, and the depth of talented leaders at the top of the company. Yet what they lack in resources, they make up for in other ways. By MICHAEL DIERBERG, Chairman of the Board, FB Corporation(First Bank) Below are some key ...

Are There Threats Lurking Inside Your Business Walls?

Fraud is an unpleasant topic; however, with its impact on the rise, business owners and consumers alike are faced with this growing threat. Often, when fraud is discussed, many of us think of the countless teams of external thieves and cybercriminals targeting businesses daily. However, did you know The 2018 Insider Threat Report claims 66% of organizations consider malicious insider attacks or accidental breaches a higher probability to occur than external attacks? Also, that a larger number of firms consider insider threat more damaging than external attacks? Intentional Insider Threats Simply put, they’re not wrong. Although external fraud attempts are relentless and of constant concern, there are also countless ways insider threat—both intentional and non-intentional—is of credible concern to business owners. “Unfortunately, employees of organizations have found a myriad of ways to defraud their employers,” said Tony Gales, Partner/CPA and acting Internet Security M ...

Lessons from the Great Recession – How to Weather the Next Storm

It’s difficult to not learn anything after $1.1 trillion and 8.7 million jobs are lost in the matter of months. We are now a little more than a decade removed of the financial crisis of 2008. Nearly every walk of life, age range, and industry was affected; whether you lost a job, savings or retirement monies, or a business, there are several lessons we can glean from the Great Recession. Much like any dilemma, there is always work to be done and improvements to be made and reflecting on what happened is imperative to moving forward and uncovering what we have learned. It is in this reflective period that we can all learn how to persist through any future downturns or lean times. Here are some key takeaways from the Great Recession and lessons learned in its aftermath that can help to avoid negative financial moves. Instant gratification: The saying that “no news is good news” can prove to be true in some businesses; however, that same contentment lulled much of the U.S. into a false se ...

How Your Business is at Risk for Fraud (And What You Can Do About It)

With technology changing at such a fast pace, it can be difficult to keep up with ever-changing fraud schemes, scams, and various regulations. The 2018 AFP Payments Fraud Survey1 uncovered some alarming numbers; fraud hit a record high in 2017 with 78% of all organizations being affected by payment fraud. Check fraud continues to be the number one form in which payment fraud is attempted with 74% of respondents reporting this as an issue. Unfortunately, check fraud remains prevalent due to advanced technology making it easy for criminals to replicate your checks. As scams become more sophisticated, so does check fraud; all an offender needs is a valid account number and printing software to wreak havoc on your business’ finances. While modern technology creates more intricate forms of check fraud, the leading scheme involves fake checks. Businesses are a hot target for criminals and are likely victims of fraud due to the amount of checks written for vendors, bill payments and more. In a 2016 American Ba ...

Cash Reserves – How Much Is Enough for My Business?

Money clichés are a dime a dozen, however, some of those financial catchphrases can truly be applied to your real life and pay off in the long run. One such saying is especially true for business owners. The saying that “cash is king” legitimately represents the importance of liquidity for any business of any size. Cash is needed for everything involved to successfully run your business. There are many reasons a business can fail, but one of the leading factors is running out of cash. A safety net is imperative to successfully persist through common events like a significant decline in sales, a mainstay customer not paying your invoice, or even being able to maintain seasonality. Every business’s safety net will be different and dependent on the volatility of the business or industry, therefore determining how much cash your business needs. While liquidity is never a one-size-fits-all solution, all businesses must consider the following key elements: Proper forecastin ...

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