Banking news and stories to help you maximize the financial success of your business Q2 2021
IN THIS ISSUE 8 Steps to PPP Loan Forgiveness Heritage Helps: Affordable Housing a publication of
Managing Business Cash Flow
Community Roots Housing / OutsideThinc
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Heritage Bank
Contents
We’re not looking for a short-term transaction but long-term success, and with Heritage Bank, we have a great win-win partnership. – Kobi Yamada, Compendium Business Profile: Compendium......................................................... 2 8 Steps to PPP Loan Forgiveness..................................................... 8 Nonprofits Pivot................................................................................ 11 Personalized Banking with Heritage Direct.................................. 12
Our community involvement is part of our company’s DNA and something we’re very proud of. In this section, we highlight the good we're doing in our communities.
Cybersecurity......................................... 7 Take these steps to protect your business and finances from fraud.
Financial Dictionary............................... 7 Empowering you to make smart business decisions by demystifying banking terminology.
PNWonderland.................................... 10 Explore the unique sights and experiences of our Pacific Northwest.
Business Banking Mentor................... 14 Streamline business banking with these cash management strategies.
My Heritage.......................................... 16 Meet our relationship managers and learn about their heritage.
Chief Marketing Officer Steve Gahler Marketing Manager Shaun Carson Editor-In-Chief Whitney Wells
IN EVERY ISSUE Heritage Helps....................................... 4
Banking Business is a quarterly publication of Heritage Bank
In February 2021 the Small Business Administration enacted emergency enhancements to the 504/(7a) lending programs. This assistance is intended to provide small business owners with critical resources, including a temporary reduction or elimination of some fees and increased capacity to make loans to underserved and underbanked borrowers. For more information on SBA lending, see page 17. To discuss your loan options, visit HeritageBankNW.com to schedule an appointment with a relationship manager near you.
Creative Director Erica Bolvin
Managing Editor Stephanie Neurer Contributors Roscinda Cruz Kathy Swift Christine Heckert Scott Michie
3615 Pacific Avenue Tacoma, WA 98418 800.455.6126 HeritageBankNW.com © 2021 Heritage Bank, member FDIC, Equal Housing Lender. The information in this magazine is general education or marketing in nature and is not intended to be accounting, legal, tax, investment or financial advice. Although Heritage Bank believes this information to be accurate as of the date published, it cannot ensure that it will remain accurate. Statements of individuals are their own—and do not necessarily reflect the position or ideas of Heritage Bank. Contact us at 800.455.6126 or visit HeritageBankNW.com to make an appointment with one of our local experienced relationship managers to discuss your individual business banking needs.
Equal Housing Lender | Member FDIC
A MESSAGE FROM OUR CEO
T
he future holds great promise for the Pacific Northwest, and Heritage Bank remains committed to supporting its community and its customers as we continue to feel the effects of last year. This includes participation in the Small Business Administration's Paycheck Protection Program (PPP). At the conclusion of the first round of PPP, Heritage had funded 4,642 PPP loans totaling $897.4 million, and we are still working hard to provide customers much needed funding through the second round.
Heritage Bank
In a competitive banking landscape, Heritage stands out because of who we are and what we provide: extraordinary service, capability and connections that empower our customers and our communities to prosper and thrive. Over the last several years— and most recently during the COVID-19 pandemic—we’ve been evolving our products and services to continue to meet the unique needs of businesses. Our employees are doing the hard work and building those relationship that make it all happen. They have access to the advantages of a large bank with the close connections to customers typically only found in a small community bank. This rare combination allows us to tailor banking needs to individual needs. That’s why we’ve created Banking Business, a quarterly magazine that will provide you with valuable education and content so you can better leverage your finances and grow your business. We’ll include timely articles from our industry experts, identify trends that could impact your business and other resources to help you streamline your banking decisions. We’ll continue to be the trusted financial partner that you can count on—a bank with invaluable experience and exceptional people who advocate for your business. We hope you’ll find the following pages useful and valuable as you continue to navigate your business today and into the future. Sincerely,
Jeff Deuel President and CEO
We are proud to have been ranked Best Bank in Washington for 2021 by Newsweek magazine. We are committed to provide you the most complete array of banking products and services to help you grow your business.
Jeff Deuel is the president and chief executive officer at Heritage Bank. He brings more than 28 years of banking experience with companies like JPMorgan Chase, Bank United, First Union Bank, CoreStates Bank and First Pennsylvania Bank. Jeff is a past WBA chairmain-elect and currently serves on the Board for the Pacific Coast Banking School. He is an avid cyclist and has climbed to the top of Mt. Rainier.
Equal Housing Lender | Member FDIC
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Heritage Bank
Visit HeritageBankNW.com to read more of our business profiles, then make an appointment with a banker who knows your industry.
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Member FDIC | Equal Housing Lender
Findin g n o i t a r i Insp Compendium is a place where people love to come to work every day. As President and CEO Kobi Yamada says, “I don’t go into the office, I go to the playground.” Compendium makes products that inspire people from pop-open cards to gift books, notebooks and journals to greeting cards and children’s books. Little touches that make a big difference and brighten our everyday lives.
Heritage Bank
As a teenager, Kobi fell in love with the idea of “the human potential,” meaning anything inspiring or the science of higher effectiveness. This concept carried him all the way through college to today. “My dad brought home a pop-open card made by Compendium and I just loved it and I identified with the inspirational tone,” said Kobi. In college, Kobi came across a second Compendium product in a store and contacted the owner. “I was on my way to Japan to start a career and I decided not to go. Instead, I took a 90% pay cut and came to work at Compendium,” added Kobi. The owner at the time couldn’t afford employees and the company was barely afloat, but Kobi was all in. “When I was a kid, I had eight paper routes, so I understood long hours and trying to make something work.” Going from one employee to a building full of talent, the Equal Housing Lender | Member FDIC
future for Compendium looks bright. “Every day people are in search of purpose and meaning. We are interested in being the company that amplifies what inspires and connects us as humans. We can do it beautifully and with great care and intention.” To Kobi, connections don’t just stop at inspiring products but extend to the company partnerships. “Heritage Bank is all about community, really knowing the people you are working with, and that we’re all in this together. We’re not looking for a short-term transaction but long-term success, and with Heritage Bank, we have a great winwin partnership.” “Our relationship with Heritage Bank is respectful, synergistic and we are grateful for it. And, it’s not just about Compendium succeeding but all parties succeeding,” he concluded. ABOUT COMPENDIUM'S HERITAGE BANK RELATIONSHIP MANAGER, BRITNI BABINGTON Britni Babington has over 10 years of banking experience and has worked at Whidbey Island Bank and Puget Sound Bank, both of which have merged into Heritage Bank. Her main responsibility as a relationship manager is ensuring all aspects of her customers’ financial needs are taken care of, from deposits to loans to treasury management services. She works with all types of operating companies, including service firms, dental and veterinary practices, manufacturers, distributors and more. She also assists with commercial real estate, including owner-occupied buildings, multi-family and residential development. Outside of work, Britni serves on the board for the Risk Management Association, Puget Sound Chapter and likes to spend time with family, go golfing and cook.
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AN INSPIRED APPROACH TO AFFORDABLE HOUSING
A
ccording to the National Association of Home Builders (NAHB), nearly a third of the nation’s households are financially burdened when it comes to owning or renting a suitable home, and more than 30 percent of their income goes toward housing. The association cites the following factors—labor and materials prices; interest rates and financing costs; federal, state and local regulations; and supply and demand—as
In the Pacific Northwest, affordable housing is a focused concern. In markets with high job growth, like the greater Puget Sound and Portland areas, financing for affordable housing developments (for moderate incomes and previously homeless individuals) can take three to five years for developers. It’s important for vibrant communities to have affordable housing for all income levels and a bank that can structure affordable housing transactions quickly and locally.
Kathy Swift
parts of the overall housing cost equation. Further analysis by NAHB shows that regulatory requirements make it
difficult to increase the supply of affordable housing.
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Banking Business a publication of Heritage Bank
Left page: Cornelius Place opened in March 2019 and features 45 apartment homes, a YMCA center, a landscaped courtyard and space for social gatherings and resident programs.
CORNELIUS PLACE CORNELIUS, OREGON
Cornelius has long been known for its agriculture heritage and continues to serve the farming community throughout the Portland metro area. While this area has experienced tremendous growth, affordable housing to meet the needs of the community was lacking. Heritage Bank, along with the city of Cornelius and development partners BRIDGE Housing and Bienestar, is proud to be part of the project featuring a mixed-use, three-story building offering affordable housing, a new state-of-the-art library and YMCA. The two apartment floors are open to seniors whose income qualify for affordable housing and will include accommodations for mobility and/or hearing impairment. Because of the unique nature of the partnerships, it was a bit more complicated to finance the construction. The banks that were initially approached turned it down, but then Heritage Bank stepped in around 2017, which helped bring the project to completion in March 2019. Kathy Swift, senior vice president, nonprofit development officer, at Heritage Bank in Portland shares insights on the project. Q: What makes Heritage Bank’s ability to finance the project different than other banks? Heritage Bank was able to use creative financing with BRIDGE Housing and the city of Cornelius to structure a $10 million-dollar loan for the construction of the building and a tax credit investment for the housing portion. This unique approach made the difference that helped the transaction to move forward. Q: Is this normal operating procedure for Heritage Bank? Yes. Heritage Bank’s belief since its founding is that our communities grow stronger when banks and neighbors work together. Our relationships with and understanding of our clients are what makes us unique.
Equal Housing Lender | Member FDIC
Community Roots Housing / OutsideThinc
Right: The Liberty Bank Building project honors the legacy of the bank, which was the first Black-owned bank in the Pacific Northwest, providing financial services to those who were otherwise unable to obtain them.
Q: What makes this project so special? The building is across the street from an elementary school. There will be inter-generational cooperation with volunteer opportunities for senior residents to interact with the kids at the elementary school as well as the library and YMCA. The building’s location puts seniors in the heart of the community with Bienestar, El Centro Cultural and other culturally specific support close by. It is also the start of Heritage Bank’s commitment in the city for affordable housing—and bringing communities like this one together. ABOUT KATHY SWIFT Kathy Swift is the senior vice president, nonprofit development officer at Heritage Bank. Kathy has 35 years of banking experience as well as expertise managing a portfolio of both for-profit and nonprofit companies, including real estate loans, lines of credit, tax-advantaged bonds and affordable housing credits. She serves as a board member for Catholic Charities of Oregon, Jesuit Volunteer Corps Northwest, the Parish Trust Fund for the Archdiocese of Western Oregon and Portland Community Reinvestment Initiative (PCRI). She also works with Save First, a financial wellness nonprofit for families and Cascadia Behavioral Healthcare, which provides housing and mental health services throughout the Portland area.
LIBERTY BANK BUILDING SEATTLE, WASHINGTON
Africatown Community Land Trust, the Black Community Impact Alliance, Byrd Barr Place, Capitol Hill Housing, local organizations and community members celebrated the opening of Liberty Bank Building in Seattle’s Central District. The building honors the legacy of the bank that once occupied that space and offers 115 affordable apartments for low- to moderate-income households. There are also three affordable retail spaces for local minority-owned businesses on the ground floor.
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Tacoma Housing Authority
Liberty Bank Building was one of the first and largest affordable housing projects in Seattle for Heritage Bank. Financing included two construction loans totaling $17.5 million and a tax credit investment of $9.6 million through our tax credit syndicator, Enterprise Community Investment. Liberty Bank Building was chosen as an Urban Finalist in Affordable Housing Finance's Readers' Choice Awards for its innovation, impact and creative problem-solving.
built next to its Salishan community and will be comprised of two parts: a 12-bed crisis residential center for homeless youth, ages 12 to 17 years old, and 58 apartments for homeless young adults, ages 18 to 24 years old. The campus is in walking distance to schools, Metro Parks’ Eastside Community Center, a regional health clinic, public transportation and New Salishan. Heritage Bank financed a $11,800,000 construction loan for the project.
ARLINGTON DRIVE YOUTH CAMPUS
CHUCK AUSTIN PLACE
TACOMA, WASHINGTON
The Tacoma Housing Authority designed this campus that will serve the 90 or more unaccompanied youth or young adults who are homeless on any given night in Pierce County. The building will be 6
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YAKIMA, WASHINGTON
The Yakima Housing Authority began construction in July 2020 on Chuck Austin Place, a $17 million project that will include 41 affordable housing apartments for veterans, a dental clinic and other support services. It’s anticipated to be
Left: Tacoma's Arlington Drive Youth Campus is within walking distance of schools, public transit and Metro Parks' Eastside Community Center. The campus helps address the barriers facing homeless youth and young adults.
complete in August 2021. The center’s name honors local veteran Chuck Austin who joined the Marines in 1943 when he was just 17 and served in World War II, the Korean War and the Vietnam war. Heritage Bank financed a $7,700,000 construction loan for the project. Heritage Bank believes in the possibilities for each and every person—and the power of community to improve the lives of those around us. That’s why we offers one-stop financing for nonprofit developers. From construction and permanent financing, to the purchasing of federal low-income housing tax credits, to making the housing transaction balance out and offer less debt and more equity. The process requires a dedicated team of experts. While most larger banks have a centralized approach to real estate and construction loans, Heritage Bank credit decisions are made in the local market. Heritage financed more the $67 million in affordable housing projects in 2020. Banking Business a publication of Heritage Bank
The Federal Communications Commission created a Small Biz Cyber Planner, a resource to help small businesses create customized cybersecurity plans. fcc.gov/cyberplanner
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Use this simple step-by-step tool to create a custom cybersecurity plan for your company.
CYBERSECURITY FOR SMALL BUSINESS In today’s world, it’s important to be vigilant in protecting your business’ computer systems and data. Every issue of Banking Business will contain tips to protect your business from losses due to a digital security breach. Require strong authentication Ensure employees and other users connecting to your network use strong user IDs and passwords for computers, mobile devices and online accounts by using combinations of upper and lowercase letters, numbers and symbols that are hard to guess. Consider changing passwords regularly. Secure the business’s tablets and smartphones Mobile devices can be a source of security challenges, especially if they hold confidential information or can access your company’s network. Require employees to passwordprotect their devices, encrypt their data and install security
apps to prevent criminals from accessing the device while it is connected to public networks. Develop and enforce reporting procedures for lost or stolen equipment. Set cybersecurity procedures and training for employees Consider reducing risks through steps such as preemployment background checks and clearly outlined policies for personal use of computers. Limit employee access to only the data systems they need for their job, and require permission to install any software. Train employees about cybersecurity issues, such as suspicious or unsolicited emails, asking them to click on a link, open an attachment or provide account information.
Equal Housing Lender | Member FDIC
FINANCIAL DICTIONARY Insured Cash Sweep
Insured Cash Sweep (ICS) is a way to keep your deposits local while ensuring FDIC insurance applies to all of it. You utilize one account at Heritage Bank, and we place your funds using ICS into deposit accounts at other ICS Network banks in amounts below $250,000, the standard FDIC insurance maximum. As a result, you can access FDIC insurance coverage from many institutions while working directly with just one bank. You’ll earn interest based on our deposit rates and receive a single regular monthly statement from Heritage Bank showing your ICS balances and other key information. You can also check your ICS balances and track other important information online, 24/7, through a specially designed Depositor Control Panel. Your confidential information remains protected.
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8 Steps to PPP Loan Forgiveness Shutterstock
1. Determine the correct form of application to use: 3508 standard form or 3508EZ. 2. Select the best Covered Period for forgivable expenses for your unique business situation. 3. Track forgivable costs during the Covered Period, which include: • Payroll and owner-compensation • Benefit costs, such as health care, company-paid life insurance and retirement contributions as well as local payroll taxes paid by the company • Certain facilities costs 4. Provide and retain required source documents for all Covered Period costs submitted for forgiveness. 5. Consider, then apply, any reductions in forgiveness that can arise from reductions in FTE and/or wage levels. 6. Consider, then apply, either of the safe harbors related to step 5 above. 7. Complete the borrower certifications required by the SBA.
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100,000+ JOBS
LOANS
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AVERAGE LOAN SIZE ROUND 1: $193,000 ROUND 2: $172,000
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WERE IMPACTED BY THESE LOANS
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Section 1106 of the CARES Act lays out the statutory rules relating to PPP loan forgiveness if your loan is greater than $150,000. In general, whether all or a portion of a PPP loan can be forgiven depends on the amounts for specified expenditures by the borrower during your chosen Covered Period. For these larger loans, you will need to complete up to eight distinct steps in order to secure the SBA’s forgiveness of your PPP loan.
AN ESTIMATED
ROUND 2
The Paycheck Protection Program (PPP), which establishes forgivable loans administered by the Small Business Administration (SBA), is a part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Then, at the end of 2020, the CARES Act was improved by the passage of the Economic Aid to the Hard-Hit Small Businesses, Nonprofits, and Venues Act (new act). In addition to providing more funding to the PPP, the new act also greatly streamlined the forgiveness process for loans of $150,000 or less.
8. Submit your application to Heritage Bank. We will review your forgiveness application and forward to the SBA for funding.
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Banking Business a publication of Heritage Bank
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APPLICATION FOR FORGIVENESS To seek forgiveness, a PPP loan borrower completes and submits one of three SBA forgiveness forms: • Form 3508 PPP Loan Forgiveness Application (standard application) • Form 3508EZ PPP Loan Forgiveness Application (simplified application) • Form 3508S PPP Loan Forgiveness Application (for loans of $150,000 or less) All three applications are in the process of being electronically updated by the SBA to reflect the new act and can be used as of March 5, 2021. Of particular note, the new version of Form 3508S is greatly streamlined as it eliminates the calculation of forgiveness and instead relies exclusively on each applicant’s certifications regarding eligibility for the program and use of funds. Steps 4-6 on the previous page don’t apply, as no calculations need be made or presented on Form 3508S. For PPP loans in excess of $150,000, a PPP loan borrower may complete and submit on Form 3508 or the updated Form 3508EZ. Both forgiveness
Equal Housing Lender | Member FDIC
applications for larger loans consist of: (i) borrower information, (ii) the Covered Period selected, (iii) a summary of forgivable costs, and (iv) borrower representations and certifications. Form 3508EZ requires fewer calculations than the 3508. Borrowers can use Form 3508EZ if they meet at least one of the following three requirements: 1. The borrower is self-employed, does not have any employees and did not include any employee salaries in its PPP loan application. 2. The borrower did not reduce: (a) the number of its employees or the average paid hours of employees between January 1, 2020, and the end of the applicable Covered Period (or employee reduction safe harbors were met related to the inability to re-hire employees or hire similarly qualified employees), and (b) any employee’s salary or wages by more than 25% during the applicable covered period when compared to the period from January 1, 2020, to March 31, 2020.
3. The borrower did not reduce any employee salary or hourly wages by more than 25% during the applicable Covered Period when compared to the period from January 1, 2020, to March 31, 2020, and the borrower was unable to operate at the same level of business activity as before February 15, 2020, during the Covered Period due to compliance with applicable COVID-19 government requirements or guidance issued by CDC, OSHA or the Secretary of Health and Human Services. Heritage Bank uses an electronic portal for all forgiveness applications. The forgiveness portal includes an integrated application process, so we will not be accepting paper versions of the forms, either delivered to our offices or uploaded into the portal. Until that time, you may review the application forms and their instructions as a tool to help you plan and organize your forgiveness effort. Contact your relationship manager or visit HeritageBankNW.com for information.
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PNWONDERLAND
Exploring the Pacific Northwest
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The Pacific Northwest is known for its lush forests, scenic coastlines and towering mountains. Whether you’re new to the region, a lifelong resident or just visiting on vacation, there’s an abundance of outdoor activities for everyone. Here are some of our favorite spots to explore.
Swim in a Collapsed Volcano OREGON
Crater Lake was formed over 7,700 years ago when a violent eruption triggered the collapse of a tall volcano. Today, boasting an intense blue shade, it’s one of the deepest lakes in the U.S. You can also hike the surrounding forest that’s home to 15 species of conifers and a wide array of wildlife.
Discover Olympic National Park WASHINGTON
Spanning nearly a million acres, Olympic National Park has it all: forests, beaches and mountains. This park serves as an incredible national playground for both scientists and visitors. You can go boating, fishing, camping, backpacking, skiing and even hike through the Hoh Rainforest, one of the only protected temperate rain forests in the Northern Hemisphere.
Raft the Rogue River OREGON
The Rogue River flows 215 miles, from Crater Lake National Park all the way to the Pacific Ocean. Surrounded by forests, meadows, rock formations and steep canyons, the river is famous for its whitewater rafting, steelhead and salmon fishing, hiking trails and extraordinary wildlife viewing opportunities.
Kayak the San Juan Islands WASHINGTON
There are 172 named islands and reefs that make up the “San Juan Islands.” The four most popular islands are San Juan Island, Orcas Island, Lopez Island and Shaw Island. Among
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all the lodging, dining and tourism activities, one of the most popular is kayaking. You can paddle your own or sign up for a guided tour. If you’re lucky, you might even catch a glimpse of an orca whale. It’s the best place in the world to see them in the wild.
Explore Lava River Cave OREGON
Imagine walking one and half hours through a mile-long lava tube. At the Deschutes National Forest in Oregon, you can do just that. Lava River Cave formed from a volcanic eruption some 80,000 years ago and offers a self-guided tour where you first descend 55 stairs to a combination of flat boardwalk, uneven surfaces and stairways. Great for beginners, the cave has railings and concrete steps, and the visitor center has maps and lanterns for rent.
As a bank that’s “grown up” in the PNW, we’re lucky to live in a place surrounded by so many natural playgrounds. That’s also why we offer our customers a number of extras—like cell phone protection, roadside assistance and travel insurance—so you have peace of mind wherever your adventure takes you. Have you been to any of the places above? Share your story with #TravelWithHeritage!
Banking Business a publication of Heritage Bank
Nonprofits Meet Increased Demand with Fewer Resources Everything changed for nonprofits when COVID-19 first appeared in our communities. The organizations had to deal with increased demand, fewer resources and new rules for operation—and people had lost any semblance of routine. This resulted in severe mental health crises and challenges were exacerbated. So, these organizations, often low on resources, had to adapt quickly to meet the needs of those who relied on them. Below: A volunteer serves
boxed lunches at Blanchet
House in Portland, OR.
Blanchet House, an organization that provides meals and housing programs, immediately canceled indoor meal services and switched to to-go operations. At the same time, they added services to meet new needs—they became the place to get a clean shirt for a job interview or to charge a phone in order to deposit a stimulus check online. Demand for services increased for El Centro de la Raza, a voice and hub for the Latino community, but many of the people they needed to reach lacked access to technology or smartphones. Emergency Food Network (EFN), which operates 80 food pantries and a warehouse in Pierce County, was faced with a sharp reduction in volunteers, fewer donations and scarcity of products, while demand for food pantries increased 76%.
Blanchet House
Nonprofits were pulled in a lot of different directions and they didn’t have departments dedicated to securing a government Paycheck Protection Program (PPP) loan that could help keep things running smoothly. Michelle Douglas, CEO at EFN, explains the challenge they and other organizations were facing, “We’re not all in the same kind of boat. Some of us are in big boats and we have way more stability and some of us are in little tiny kayaks and we are being very, very rocked by this.” For many of these nonprofits, Heritage Bank was a familiar face in their operations—a fundraising partner, a sponsor, a volunteer—and they knew they could turn to us for help navigating the PPP loan process. In many cases, we were able to help them with the application process and get approval within a day or two.
See how we're supporting local businesses and nonprofits at HeritageBankNW.com/allofus
The PPP loans were a lifeline. “We didn’t budget for this crisis. No one did,” says Scott Kerman, executive director of Blanchet House. They used the PPP loan to pay their employees and cover packaging costs that came with to-go service. EFN used the loan to keep cash upfront so they were able to buy food they needed when it was available. Estela Ortega, executive director of El Centro de la Raza, explains, “A lot of times for people who are in need, a nonprofit may be the last stop in terms of being able to provide an array of services that are going to stabilize people’s lives.” The loan meant they could keep their full staff and continue regular operations. For now, these organizations are doing their best to continue serving the needs of their communities. Scott puts it simply, “At the end of the day, we’ve handed out maybe a thousand meals. We’ve handed out clothing. We’ve charged phones. That’s it. That’s the measure of the day. That’s what we do, and so every day is a success.”
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Digital adoption isn’t a new concept. For years now, enhanced technology, smartphones and apps have disrupted just about every industry, and consumers have now come to expect these services from their favorite stores, their insurance company and even their bank. And it’s not just consumers; small- to medium-sized businesses (often referred to as SMBs) also seek a banking partner who can meet their digital expectations. According to a J.D. Power survey1, the number of small businesses using their bank’s mobile app increased to 61% in 2019, up from 53% in 2018. While every business differs in size, industry and product/ service, going digital is a key advantage—to reduce costs, automate processes and remain competitive. This is especially true in the wake of a global pandemic. With a staggering number of SMBs being hit hard, they’re also learning to adapt to new market realities. From a shift in consumer habits, depleted supply chains and cash management concerns, the way they manage their funds while also continuing to meet the needs of their customers is more urgent than ever. Now, as we begin to recover from the economic crisis, it’s “critical for financial institutions to take advantage of digital to foster engagement with clients, focus on efficiency and drive their innovation agenda.”2
WHAT OUR CUSTOMERS ARE SAYING: “I am very impressed with the online banking system and the other online resources that Heritage offers. These options far exceed what was available for us at the credit union we used to bank at.” “Very nice new site! Wonderful improvement. So easy to use and so intuitive.” Visit HeritageBankNW.com and click the Business tab for additional details.
HERITAGE DIRECT: A BETTER EXPERIENCE FOR OUR CUSTOMERS
A few years ago, before the pandemic, we recognized the need for improved banking technology. We spent the next two years transitioning our business online banking to a new platform that was more comprehensive, customizable, personalized and—most importantly—digitally-focused. Called Heritage Direct, the platform allows customers to see a holistic view of their business: payroll, balance and transaction reporting, recurring payments and transfers, ACH and wire payments, online statements, user accounts and more. Not only that, but the platform is completely customizable, with drag and drop widgets that are tailored to each users’ unique needs. Widgets are small components that allow you to quickly see information or perform a variety of common tasks, like making a payment, transferring funds or stopping a payment on a check. Then, when a user downloads and opens the Heritage Direct mobile app, they’ll see the exact same personalized workspace as they do on their computer, a great feature for those SMBs who do most of their business on the go. Other features include: • Up to 365 days of balance and transaction reporting history • Direct Connect with Quicken & QuickBooks • Customizable security controls • Single sign on for remote deposit capture—meaning no extra username or password to remember REFERENCES 1 jdpower.com/business/press-releases/2019-us-small-business-banking-satisfaction-study 2 www.ey.com/en_ca/digital/transformation/how-banks-can-leverage-digital-innovationto-compete-in-the-fast-changing-small-medium-business-market#footnotes www.forbes.com/sites/forbesfinancecouncil/2020/03/12/meeting-the-unique-challengesof-smb-banking-through-digital-transformation/?sh=76969ce28396 www.smefinanceforum.org/post/the-importance-of-going-digital-for-smes americandeposits.com/community-banks-digital/
Personalized Banking With
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Banking Business a publication of Heritage Bank
Do all your banking on your mobile device with our app.* – Deposit checks – Transfer funds – Pay bills – Originate ACH & wires – View balances & transactions Download the app today! Just search “HB Direct” in your app store.
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* Message and data rates from your wireless carrier may apply.
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Illustration: Shutterstock
BUSINESS BANKING MENTOR
Managing Business Cash Flow
Business owners have a lot on their plate. Inventory, staffing, schedules, banking, paperwork and so much more. They work tirelessly to get things up and running and plan hard for expansion or growth. But the one thing that drives it all is cash flow. Keeping funds moving in the right direction requires a deft hand and the ability to save for a rainy day…or an unexpected pandemic. Here at Heritage, treasury management relationship officers like Roscinda Cruz help businesses accomplish all that and more.
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Banking Business a publication of Heritage Bank
ash flow is more than simply bringing in funds through sales and paying your staff and vendors for their service. Industry reports explain that: “Cash flow is one of the most critical components of success for a small or mid-sized business. Without cash, profits are meaningless. Many a profitable business on paper has ended up in bankruptcy because the amount of cash coming in doesn't compare with the amount of cash going out. Firms that don't exercise good cash management may not be able to make the investments needed to compete, or they may have to pay more to borrow money to function.”1 Roscinda Cruz has worked in banking for her entire professional career, a total of 22 years. She’s seen the economy, technology and business outlook pendulum over the years and knows how uncertain things can feel. Originally from Guam, she settled in Oregon in 2000 where she works hard with, and for, businesses across the Pacific Northwest.
B
efore COVID-19, Roscinda admits that her treasury management advice didn’t change much based on a business’s size, longevity or future goals. “Businesses of all sizes are facing the same dilemma: how to keep employees and customers safe while keeping revenue flowing in.” But perhaps unsurprisingly, the arrival of the coronavirus brought changes. “Since the pandemic, it’s become a requirement for businesses of all sizes to have some sort of online presence to continue to stay in business, regardless of industry,” she explains. “This wasn’t always the case.” “Work with your banker or bank to determine the appropriate treasury management solution or solutions to help expedite funding for receivables,” Roscinda advises. “Treasury solutions like ACH Origination and Merchant Services can help businesses improve accounts payables and accounts receivables while providing the flexibility to meet your customers’ needs now and in the future.”
A
utomated Clearing House (ACH) is a funds transfer system that provides for the interbank clearing of electronic entries for participating financial institutions. Whereas Merchant Services can run the gamut from credit and debit Equal Housing Lender | Member FDIC
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card processing to securing your payment solutions and running a financial checkup to look for ways to add value or save money. “Basically, businesses should examine their options to expedite funding of accounts receivables, like speeding up payments and collections, ACH and Merchant Services,” says Roscinda, “and looking for more efficient solutions for everyday spending and accounts payables like going paperless whenever possible, using online accounting software to track invoices and payments and more.”
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usinesses bring in funds from the sale of goods or services, but they spend them on advertising, insurance, inventory, payroll, taxes, rent, utilities, supplies and licenses…just to name a few. Managing everything may feel overwhelming, but you don’t have to go it alone. Heritage Bank offers services like checking, savings and investment accounts, online banking facilitation; loans for commercial real estate, construction and lines of credit; and a range of international banking options. We can help fund, build, maintain and expand your dream business from day one until retirement. REFERENCES 1 www.inc.com/encyclopedia/cashflow.html#:~:text=Cash%20flow%20is%20one%20 of,amount%20of%20cash%20going%20out.
BY ROSCINDA CRUZ Roscinda is a treasury management relationship officer and has been in banking for 22 years. She’s worked at a number of community banks in the Pacific Northwest, holding positions in management, business development, commercial and retail services. Roscinda now focuses her time helping her customers with treasury management services. Outside of work, Roscinda likes to volunteer at Habitat for Humanity, Aloha Junior Baseball Organization and the Beaverton School District. She graduated from Oregon Bankers Association Operations School in 2004 and Oregon Bankers Association Advanced Branch Managers School in 2009.
HeritageBankNW.com
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MY HERITAGE
Surfing and Running 100-Mile Races My passion for running started at Marshall Middle School in Olympia, Washington—I ran a mile in 5:02, which became the school record that year. I continued to run throughout high school and our team even won the state championship in cross country. When I left for college at Western Washington University in Bellingham, Washington, I chose to focus less on running and more on economics, art and surfing. In my junior year, I got the opportunity to teach pottery in Thailand for a quarter and was able to travel around while I was there. After teaching, I hopped on a train to Singapore, rode a boat to Batam Island and boarded a plane over to Padang, West Sumatra. There, I met a local Indonesian kid that could speak English. He took me on a public fishing boat to the Mentawai Islands, which are known for being one of the best places in the world to surf. I lived in a little hut on the island with the local people who spent their days extracting coconut oil and selling it on the mainland. I surfed a lot during that trip. The waves were perfect, and it was truly a once in a lifetime experience that I’ll never forget. Especially the one time I went surfing by myself and subsequently had all my
belongings stolen from the beach—I had to walk 30 minutes back through the jungle with only my surfboard, wet swim trunks and bare feet. I even ended up getting a worm in my foot. But that’s a story for another time… After Indonesia and graduating from Western, I moved to Hawaii for a year to continue surfing and living the dream. However, I knew surfing wasn’t the only thing I wanted to do for the rest of my life, so I moved back to Washington. One evening, during dinner with my parents, two sisters and brother, we were chatting about how they had all hiked Mont Blanc in France. Surprised that I—one of the most adventurous of the bunch—had never done this, I decided to make it happen. Now, they’ve only spent a couple days hiking around the mountain. So, when I found out about the 105 mile race, I decided I wanted to run it. Ultra-Trail du Mont-Blanc (UTMB) is one of the largest trail races in the world for ultra-distance with over 30,000 feet of elevation gain. I figured out what I needed to do to participate and that’s how I ended up running my very first 100-mile marathon in March of 2018. Naturally I had to train for the long distance, so I started with a few “small” races. I competed in one around Mount Saint Helens, entirely on the Loowit trail. Another on the Oregon coast running the beach and coastal mountains. In November, I did a 50-miler at Smith Rock down in Bend, Oregon. And then I continued to train hard through the winter. I ran nearly every day or night, rain or shine, headlamp or not. In March, I traveled to the Horse Heaven Hills near Richland, Washington and competed in the Badger Mountain Challenge—100 miles and somewhere between 13,000 and 16,000 feet elevation gain. I finished just under 23 hours…surpassing my goal of 24 hours! It’s pretty cool to be able to say I ran 100 miles in less than a day.
Scott runn
solo in 2019
BY SCOTT MICHIE Scott Michie was previously the branch relationship manager in Tumwater, Washington before becoming a vice president, commercial banking officer. Scott started at Heritage in 2006 and worked his way up from a teller to his current position. He will run the UltraTrail du Mont-Blanc in August of 2021.
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Issue 1 | 2021 Q2
Scott Michie
m 2 Rim 2 Rim
Canyon Ri ing the Grand
I think my background in surfing, traveling and running has influenced my work here at Heritage. I can relate to people in a different manner. I understand the “dreamer” side of people; the ones who want to do everything. But I also understand that you have to be focused and committed in order to do all those things. My job is to get to know my customers, listen to what they want and figure out a way to help them get there. Life is a journey that is much longer than an ultra-marathon. I want to help people ring the bell at the finish line and get “spit out of their metaphorical barrels” (a surfing term). So let’s do this thing called life the right way! Banking Business a publication of Heritage Bank
SBA Solutions to Help Build and Grow Your Business
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The SBA works with lenders to offer loans to businesses that would not be able to do so through conventional means. For the business owner, this gives them longer terms without balloons, increased leverage or the ability to create a start-up. To be eligible, type and size of the business are factors as well as character of the owners and key managers and credit history. There are a variety of SBA solutions and navigating the program can be cumbersome. This means the business relationship is just as important as the transaction. The right lending partner is key for a successful experience and proper SBA solution. With more than 30 years of expertise, Heritage Bank’s SBA team is willing to look at all types of businesses to determine the right solution. The SBA’s flagship 7(a) program enables a loan amount up to $5 million and can be used to purchase or refinance commercial real estate, equipment, inventory, working capital, business acquisition (including a partner buy out), business debt refinance, start up or expansion. The 504 program has similar eligibility as the 7(a) but the proceeds are limited to purchase of commercial real estate (including land, improvements, grading, street improvements, utilities, parking lots and landscaping) and the purchase of long-term equipment. Active and experienced lenders qualify for the SBA’s Certified and Preferred Lender Programs. This enables banks to approve loans on behalf of the SBA resulting in an expedited loan closing. Heritage Bank’s Preferred Lender Program (PLP) status is the highest level of approval a lender can hold and permits a more streamlined and flexible loan application process and service requirements and expedited approval process. It also allows us to use our own underwriting and servicing policies. Equal Housing Lender | Member FDIC
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he Small Business Administration (SBA) is an independent agency of the federal government established in the 1950s to aid, counsel and assist America’s small businesses and provide support to disaster victims. Today, it assists more than 30+ million small businesses in the areas of finance, contracting and management.
The right lending partner is key for a successful experience and proper SBA solution. With more than 30 years of expertise, Heritage Bank’s SBA team is willing to look at all types of businesses to determine the right solution.
BY CHRISTINE HECKERT Christine Heckert, senior vice president, SBA manager, joined Heritage in 2014. She has been in SBA lending since 1988, and in 2008, she received the Financial Services Champion award from the SBA Seattle District. She has a bachelor’s degree in business administration from Gonzaga University and is also a graduate of the Washington Bankers Association's Executive Development Program. Christine serves on the Technical Issues Committee and the Region X Liaison Committee for the National Association of Government Guaranteed Lenders, which is a trade organization for SBA 7(a) loans.
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Ranked Best Bank in Washington, 2021
"Heritage approaches us with solutions before we come to them with problems.” - Scott Holley, Eddyline Kayaks
Unique solutions for unique businesses We provide a deeper level of personalized service that helps us tailor the right solutions for the way you work. And when we help businesses in our community, it helps us all. HeritageBankNW.com/allofus
Equal Housing Lender | Member FDIC
HeritageBankNW.com | 800.455.6126 |
