Illinois business owners need access to capital and community support

  • Stephen Ball

    Stephen Ball

  • Byline Bank location at 1001 Lake St., Oak Park

    Byline Bank location at 1001 Lake St., Oak Park

  • Byline Bank at 6400 W 79th St., Burbank.

    Byline Bank at 6400 W 79th St., Burbank.

 
By Stephen Ball and Scott Baskin
Byline Bank
Updated 1/25/2022 9:59 AM

Running a successful business requires balancing growth aspirations and financial reality during the best circumstances.

The past two years have been far from that. Yet Illinois business owners have showed remarkable resilience. Each day we hear from business owners about the challenges and hopes they have for their companies.

 

Supporting local businesses takes a concerted effort from government, financial institutions and local economic development groups, but it's an effort that's well worth it.

What business owners are facing

• Staffing: The top challenge for businesses of every kind is staffing -- hiring and retaining the employees they need to run and grow their business. Hiring is challenging at every job level from entry level to senior management. Companies are competing for talent as jobseekers have a wealth of options not just locally, but nationally as remote work has become more common. Many employers are offering signing bonuses or increasing wages to fill openings.

• Supply chain lags: If you've had work done on your house, tried to buy a large item or even ordered holiday gifts late, you've witnessed how supply and labor shortages are compounding. When you're a small business, it costs money to carry inventory, but if you want to meet customer demand and deliver on time, you likely will need to order inventory sooner to contend with shipping delays.

• Inflation: Smaller companies' margins are being crunched by larger companies with more leverage to negotiate pricing. Combine inflation with supply chain shortages, and it's an exponential use of working capital to hold more -- and more expensive -- inventory.

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• Property tax hikes: Business owners are affected directly and indirectly by property tax increases, depending on whether the company owns its building or leases, and how long the rent is locked in -- eventually rents, especially for storefronts will go up to cover the increased tax.

What these challenges mean

All of these challenges point to a more expensive environment to run a business. Whether you face higher employee retention costs, higher production costs, longer lead times or potential rent increases, you need access to your working capital. Simply, working capital is cash plus what you're owed (accounts receivable) plus inventory minus bills that are due. A healthy business will have positive working capital but might not have cash because it's waiting to sell inventory or collect payments.

If business owners have access to working capital early, they can time inventory purchases to get better prices, ensure there is never a payroll crunch, and capitalize on any new opportunities in the market.

How can business owners be supported

In this challenging economic environment, business owners need experienced advice to plan and finance operations and growth. They should work with bankers and institutions that are local and can make decisions nimbly -- just as they have to do.

                                                                                                                                                                                                                       
 

Byline Bank's team of business bankers understands the challenges and solutions to help businesses. Providing an average 20-plus years' experience each, the team members advise business owners whether their needs are access to working capital, Small Business Administration funding, purchasing equipment or a location, collecting payments quicker, or preventing fraud.

Supporting vital local businesses is a community effort. Byline partners with micro lenders, government organizations and other outlets and supports funding for local chambers of commerce.

One such organization is the Small Business Advocacy Council, which lobbies for legislative backing for hiring, retraining, child care and other programs to address issues facing the small business owner in Illinois. Together, banks, community organizations, business owners and state and federal agencies can create a supportive environment for businesses to thrive.

• Stephen Ball is Senior Vice President, Head of Business Banking for Byline Bank and Scott Baskin is CEO of the Small Business Advocacy Council.

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