This morning the Kansas City CFO group met for their first quarter event , entitled “How to Finance Your Business: A discussion with Kansas City’s local banks & non-traditional financing resources”, featuring a panel of financial experts including Mike Maddox, CrossFirst Bank, Cory Miller, UMB Bank and Mike Roznowski, Fractal Capital Advisors.
The panel discussion focused on the current state of the lending environment, as well as the financing options available at varying risk levels. The panel fielded a variety of questions including how the new rules and requirements surrounding HVCRE will affect the real estate market, trends in pricing and leverage multiples, personal guarantees, covenants and the new guidelines regarding leverage loans and the impact on credit decisions moving forward.
A few key notes:
How should a CFO prepare, to present their company in the best possible light when meeting with a lender?
Mike M: “Be organized, prepared and ready to talk about your company and what’s going on.”
Cory: “Be responsive, as the finance executive, it’s important to be responsive when receiving questions from a lending source. For example, if you are taking too long to respond to emails containing financing questions, it may add unnecessary skepticism to how much of a handle you actually have on your business.”
Mike R: "From an alternative funding perspective, companies seeking this option have often been turned away by the bank(s) for one reason or another – clearly getting those hurdles out front early, so we can work together to move forward, is key."
What should a CFO look for / consider when seeking a financial resource?
Mike M: "Do your due diligence on the source and consider the four C’s. Does your source have character? Are they committed to the market and industry you are working within? Are they competent in your business, your industry and your growth potential and most importantly, do you connect?"
Mike R: "Adding on to Mike’s comments, the connection and commitment are key – it’s imperative you understand how the lender is going to behave if everything doesn’t go exactly as planned."
Cory: “Use your peers. Your CPA and Attorney have those banking relationships and understand how those resources work. You want to make sure you have a good relationship and connection with whomever you choose, so that you can work through those unexpected bumps in the road.”
Save the date for the second quarter Kansas City CFO Breakfast event on June 2nd, featuring Greg Graves. Look for more information in your inbox in the coming months!