Aligning your capital structure with growing your practice

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Huntington helps small business owners examine their company’s capital structure to find a solution that is right for them. Learn more today.
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As we navigate uncertain economic times, remember that small businesses are typically the hardest hit. We need only look at the Great Recession for proof. Between December 2008 and December 2010, approximately 1.8 million small businesses closedi.

Many small business owners face significant debt. Lending agencies report outstanding loans to small businesses totaling $619 billion, as of June 2017 (the latest data available)ii. Instead of using money to grow their business, borrowers are paying interest instead.

What you may not realize is by restructuring your comprehensive debt picture, you may promote stability and potentially even growth in times of economic uncertainty. Though it is easier to maximize your capital structure during good economic times, it is still valuable to look at what you can do in tough times. The goal is to prepare your practice ahead of time for changes in the economy. Challenges are present in all stages of the cycle and can include fluctuations in revenues and interest rates. It is important to monitor fixed costs, including payroll, materials, and supplies.

By addressing the overall debt picture now, you can take steps to help optimize your practice’s credit for any economic twists and turns that may lie ahead. You’ll also be working toward the goal most owners strive for: maintaining strong working capital and positive cash flow.

As you review your current capital structure, consider these questions:

  1. Should you consolidate your existing debt?
  2. Can you lower your interest rates?
  3. Are you able to lower your monthly payments?
  4. Should you secure access to additional capital – even if you don’t need it today?

How much debt a practice supports is largely based on the owner’s comfort level. Huntington can work with you to understand your goals, your finances, and the specific nuances of your practice. Then we’ll recommend a plan that can help make your practice stronger in today’s evolving economic climate.

iWeltman, Barbara. 10 Years After the Financial Crisis: The Impact on Small Business. Investopedia. September 13, 2018.

iiUS, Small Business Administration, Office of Advocacy, Small Business Lending in the United States, 2017. January 2020.

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