(BPT) - American businesses of all sizes continue to cope with the economic fallout of the coronavirus pandemic. For 18 months, many have been forced to overhaul their business models to adjust to changing health and safety mandates, shifting consumer behaviors, and imbalances in supply and demand. In the West, problems have been exacerbated for some proprietors due to Mother Nature, with agricultural producers dealing with severe drought conditions in certain areas.
“We’re seeing local businesses trying to cope with not one challenge, but many challenges that are converging just as a post-pandemic environment comes into view,” reflects Victor Robbins, South Central Wyoming market president of First Interstate Bank. Some of the most acute issues are related to the supply chain and labor shortages.
News of supply chain woes is nothing new, but reading headlines is one thing and living them is another. Many local businesses have been experiencing higher costs for raw materials and longer waiting periods for deliveries. Such conditions have put some niche companies out of business, but the fallout doesn’t end there. Rather, clients of those businesses have had to ferret out other sources, exerting additional pressure on remaining suppliers while needing to adjust their own schedules and earnings expectations.
Labor shortages mean that competition for qualified workers is high, and businesses are finding that they must enhance pay and benefits to attract applicants. That higher compensation comes at a price, and proprietors are rethinking how much money they will need on hand to fund their workforce appropriately moving forward.
Of course, some industries have been hit harder than others. On-again, off-again pandemic restrictions plagued hospitality businesses with instability, potentially discouraging individuals from working in the industry altogether. In commercial real estate, property owners lack clarity on future demand, as COVID-19 surges prompt businesses to rethink or postpone bringing employees back to the office.
Finally, on top of pandemic impacts, the West has also been dealing with severe drought conditions. Many businesses centered on agriculture are modifying their forecasts, as an extremely hot and dry summer took its toll on yields.
“Despite all the challenges out there facing our regional businesses, there is some hope,” says Robbins. “Financial support is still available, and trusted banking partners can help get business owners connected to the programs and products that will keep them on track.”
Although the popular Paycheck Protection Program has long expired, other government programs remain available to business owners depending on their industry and their particular circumstances. For instance, the Small Business Administration offers Economic Injury Disaster Loans for small businesses and nonprofits experiencing lost revenue due to declared natural disasters, such as droughts or wildfires. The Shuttered Venue Operators Grant helps qualifying venues with revenue declines of at least 25% due to pandemic closures. Additional programs are available through the USDA and the Farm Service Agency, as well as through community development financial institutions (CDFIs), which concentrate on affordable lending to low-and-moderate-income communities.
Whether business owners want to access federal aid or simply access capital through traditional banking channels, their banker will be an important resource in easing the process. A trusted banker can help identify programs that are the best fit, navigate the application process and deadlines, and advise on prioritizing how funds are used.
Beyond accessing government aid, local commercial bankers are able to fully understand the unique nature of their clients’ needs and business goals. These financial professionals typically have an in-depth understanding of regional economic and competitive conditions, so they can help advise on making the most of capital within a particular market. They can also serve as a sounding board on how to build reserves and deploy them carefully and efficiently as a business grows.
Although the world is ready for the pandemic to be in the rear-view mirror, it’s a reality that will likely need to be addressed for some time to come. Local businesses don’t need to meet the associated challenges alone; with a trusted local commercial banker, they can fortify their companies and position them for growth ahead.