Ask the Experts is a financial forum for education and advice as CNB’s experts answer your questions on financial topics that interest you. The experts of this show featured Susan DiProjetto, Senior Vice President, Business Banking Sales Manager, and Michael Mallaber, Senior Vice President, Director of Commercial Services.

Many business succession plans focus on the succession of ownership but neglect to address the issue of management succession. Whether you expect the management team that will follow you to the corner office to come from inside or outside the company, you should consider training one or several people to serve as interim or successor management. This can serve multiple purposes. First, having trained successor management in the business can work into your short-term contingency plan established to cover your unexpected absence from the business (due to death, for instance). Second, trained successor management can serve as interim management during the transition period during and after your withdrawal from the business at your retirement, while your interest is being transferred after your death, or when you head out for that long vacation you have been yearning for.

In a general sense, lending commonly boils down to credit risk. Banks typically charge higher interest rates if they perceive a borrower has greater risk of default. When risk is anticipated to be too high, banks might not originate or renew a loan at all. By establishing regular communications with your lender or Relationship Manager, you have the opportunity to truly educate them about your business. This is just one way to avoid misunderstandings about perceived risks within your business.

Buy or lease?  It’s a decision many small businesses face.  Owning real estate certainly can have advantages, including the opportunity to build equity.  But many small businesses in need of space choose the rental route instead.

Commercial Real estate investing - Have you been thinking about investing in Commercial Real Estate? There are many ways that investors get started, but first you should understand the risks involved in owning and managing Commercial Real Estate. Management Experience/Depth, Demonstrated Ability to Repay, Adequate Collateral, Investor Liquidity.

 

 

It's time to develop a business plan.