Webinar Rewind | Growth Strategies for High-Risk Industries
YOUNGSTOWN, Ohio — Acquiring capital to expand can be a challenge for any business owner. But for high-risk industries, it can prove even more difficult because financial institutions might see the business as too risky to back.
High-risk industries include restaurants, bars, hotels, gas stations, day cares and contractors. Essentially, industries that have “low-barriers to entry with limited capital needed to start,” said Terry Louk, director of SBA lending at Valley Economic Development Partners.
Louk was joined by Executive Director Teresa Miller and Mario Nero Sr., director of economic development lending, for a webinar on May 20 with Jeff Leo Herrmann, CEO of the Youngstown Publishing Co. During the webinar, Louk, Miller and Nero discussed growth strategies for high-risk industries.
“There’s a number of different things that businesses can do to overcome the high-risk classification by the bank,” Louk said. “They’re going to want to look at having a strong technical assistance or support team.”
That team includes an accountant, lawyer and professional support. Companies should also keep up-to-date financials and maintain good business software, such as QuickBooks, to which banks can easily relate, he added.
Nero said it’s important that businesses in high-risk industries can show they are turning a profit, and aren’t working to reduce their sources of income.
“When it comes to borrowing money, cash it king,” Nero said. “Cashflow is extremely important. Especially with high-risk industries.”
Above all, it’s important to understand one’s business, Miller said. That includes, keeping your federal Employer Identification Number (EIN) handy, filing articles of incorporation with the state and ensuring the name used on tax forms exactly matches the name on the articles of incorporation.
Miller also recommends keeping cash reserves on-hand. While she recognizes that isn’t always easy to do, it’s important to set funds aside every month.
“Having that cash reserve helps make you bankable,” she said. “It helps make the deal a little more easier to get through.”
For more insights, watch the webinar posted above.
Copyright 2023 The Business Journal, Youngstown, Ohio.