Business Disruptions: How Your Banking Partner Can Help You Respond

Canadian Western Bank

At a basic level, business disruptions are any occurrence (anticipated or not) that delays or disrupts your normal operations.

As CWB’s Rahul Malik, AVP, Business Development explains, disruptions can look different to every business because every business is different.

“They can vary from something that’s throwing a wrench into the regular course of business – like an important material is in short supply or there’s an ongoing labour shortage – to something more drastic like a flood or wildfire,” says Malik, who’s based at the organization’s Mississauga Banking Centre.

Regardless of the type of disruption, he says cash flow is the number one impact.

“Disruptions can affect your revenues. They can affect your collections. And when your ability to make money is restricted, you can’t pay your debts,” he says, adding this can then impact your ability to serve clients. “Once your clients are affected, you’re exposed to a lot of other dimensions – including legal repercussions and reputational damage.”

A strong relationship with a specialized financial expert like Malik goes a long way in mitigating the impacts of a disruption. Here are 4 ways your business bank can support you through tough times:

1. Seasonal loans

These loans can help when weather disrupts a business’ operating cycle and are incorporated as a type of seasonal bulge to an owner’s operating line where they’re on margin.

2. Equipment master lines

When there’s a technical failure, an equipment master line gives a client access to funds to help them get back up and running – without needing to go through the entire lending application process again.

3. Increased inventory caps

If there’s a supply chain issue, a client can explore with their banker the possibility of increasing the business’ inventory cap against their line of credit. This enables them to buy more inventory upfront and also leverage any volume discounts for buying in bulk.

4. Loan strategies

If you’re having difficulty meeting your lending terms, it’s crucial to connect with your banker right away to discuss options – because there are options. For example: putting a debt on interest-only for a period of six-to-12 months with an agreed-upon action plan, or lowering interest payments by re-amortizing over a longer period.

Need help navigating disruptions?

Reach out to experts like Rahul Malik at CWB’s Mississauga location: (289) 998-2688.