Nate Callister
Following a global pandemic, Utah finance executives have redefined adaptability with warp-speed reconfiguration of capital investment plans. With a potential economic slowdown on the horizon in 2023, how can Utah businesses prepare?
Between supply chain stagnation, rapid inflation, rising interest rates and one of the tightest labor markets to date, business leaders continue to operate in an environment that many haven’t seen in their professional lifetimes.
While escalating interest rates are no longer a surprise, with each Fed announcement, I’m having more conversations with business leaders to help them develop creative financing solutions to meet their short- and long-term goals.
Automate Operations
One short-term goal that many Utah middle-market companies are considering, or implementing, is business automation. Many companies are investing in technology to mitigate the impacts of labor shortages. Some factors to weigh when automating and streamlining operations include:
• Consider upgrading ERP or inventory management systems to provide the automation you need today and in the future. As companies grow, often systems lag behind, which requires more human capital to get the job done.
• Analysis of companies’ treasury management services can also help improve cash flow and save on labor costs by optimizing digital payments and streamlining account receivables.
Solving the Supply Chain Conundrum
Utah companies experiencing significant inventory challenges and supply chain delays may consider:
• Working capital or supply chain financing to help bridge inventory and account receivables gaps.
• Interest rate hedging and foreign exchange services to help mitigate rising rate impacts.
Bank on Long-Term Relationships
Now and through all economic cycles, it’s imperative to work with your financial institution to maintain adequate cash flow and strong liquidity positions. Working with your commercial banking relationship manager early and often can help avoid unwanted surprises and offer flexibility. It’s a great time to conduct a thorough financial review, including cash flow projections, and have frank conversations to make any necessary adjustments to loan structures and working capital lines of credit.
Equally important is working with a bank that has comprehensive, industry-specialized capabilities to support your growth over time. This can mean finding a financial partner with industry expertise and premium services like treasury management, investment banking, foreign exchange and wealth-management tools.
In addition, borrowers should seek a financial partner with robust capabilities and a proven commitment to supporting your industry over an extended period of time. Your bank should be committed not just to providing capital at attractive rates, but also to helping you and your company succeed financially.
Utah business leaders know standing still is not an option. Through it all, goals should remain the same: Ensure that the financial future is deliberate, stable and successful — not reactive based on current market variables.
Nate Callister is Wells Fargo’s Utah commercial banking market executive.
Opinions expressed in this article are general and not intended to provide specific advice, recommendations for any individual or association or an offer to extend credit. Contact your banker, attorney, accountant or tax advisor with regard to your individual situation. The author’s opinions do not necessarily reflect those of Wells Fargo Commercial Banking or any other Wells Fargo entity. All Wells Fargo credit decisions are subject to credit approval.