Webinar Replay: Positioned for Growth: Lending & Access to Capital
00:00:03.010
Rachael Sampson: Well, hello everyone! I'm Rachel Sampson, Head of Community Banking and National Director of Key for Women at KeyBank. I want to thank all of you for joining us today for Part 3 of our Key for Women, Women in Wealth series. This conversation is especially timing, as many business owners that I hear from across the country and other professionals are thinking about what's next. Whether that's expansion, transition, or planning for a long-term impact of the great wealth transfer already underway. Access to capital is one of the most powerful tools available to support growth, yet it's often one of the least clearly understood. Women own more than 13 million businesses in the United States and generate over $2 trillion in annual revenue. Yet, still challenges accessing and the right financing to support growth at scale is a challenge. That gap becomes even more important to understand as significant wealth shifts from one generation to the next, and business owners prepare for succession, liquidity events, or intergenerational planning. What we know is that hesitation around lending is rarely about lack of ambition. We know, we can do hard things. It's often more about uncertainty that can bring on feelings of anxiety and worry and other things, and we really want to help demystify that and understand, how does capital fit into the bigger picture? How does it support both current growth and future transitions? And how do today's decisions align with personal and business goals in a changing economic environmental landscape? That's the lens for today's discussion. We'll explore how lending fits into a holistic financial strategy. How to prepare for meaning conversations with your banker, and how thoughtful capital planning can support confidence and flexibility during pivotal moments, including growth phases, ownership transitions, and generational wealth planning. We'll also address common misconceptions and reframe capital not as a one-time transaction, but as an ongoing strategic tool. I'm pleased to be joined by my dynamic panel, an outstanding group of leaders here at KeyBank who will bring a well-rounded perspective to this topic. First up, we have, who's going to lead our conversation today, Mrs. Cathy O'Malley-Kearney, National Head of Key Private Bank, who will lead this discussion and share insights on how capital decisions connect to long-term wealth strategy and legacy planning. Cathy's been doing a phenomenal job leading our discussion over our four-part series, so we are so glad to have her. Next up, we have Sabrina Webster, who's Commercial Sales Leader based in Syracuse, New York. Sabrina focuses on driving growth through strategic partnerships and customer-focused commercial solutions. She brings a collaborative, results-driven approach and deep experience across commercial lending. pricing strategy, financial performance, and cross-functional leadership. Sabrina works closely with business owners to help them navigate opportunities with clarity and confidence, making her perspective especially valuable in today's environment. And last but not least, we are joined by Kalima White, an estate planner with Key Private Bank and a former practicing attorney with more than 25 years' experience advising high-net-worth individuals, families, and business owners on estate. Trust, tax planning, and all matters through and through. Kalima helps clients develop thoughtful, tax-efficient wealth transfer strategies that align today's business decisions with long-term legacy goals, making her perspective especially relevant as we think about access to capital and future outcomes together. So, as you listen today, regardless of your business size, I encourage all of you to think about where your business is in its life cycle, even if that's in the exploration phase or in a mature phase. and how capital supports both opportunity and continuity, and what questions you may want to bring to your next banking conversation. As always, please, please, please be active in the chat. We'd love to hear your reactions throughout the conversation, as well as post any questions as you have, as we will get to as many as possible as we move through our program. So, without further ado, I'll turn it over to Cathy.
00:04:45.720
Cathy O'Malley Kearney: Thank you, Rachel. Great to be here, everyone. Wonderful to see you this afternoon, and I love the introductions popping up in the chat. It really brings this whole experience to life, so keep it going. As… as Rachel mentioned, my name is Cathy O'Malley Carney, and I lead the private bank here at Key. I am excited to have you all with us, and I'm especially grateful to have my partners Sabrina and Kalima with us to share their perspectives on how to access and properly deploy capital. So let's jump right into it, and Sabrina, I'm going to start with you. When you hear access to capital. What should our business owners be thinking about?
00:05:32.790
Sabrina Webster: Great question, Cathy. When we hear the phrase, access to capital, most people picture one thing. Sitting across from a loan officer, hoping for a yes.
00:05:42.800
Cathy O'Malley Kearney: But really.
00:05:43.310
Sabrina Webster: Real access to capital is more nuanced than that. It's about alignment. It's about having the right capital in the right form, at the right time, aligned with your actual goals. That almost never happens by accident. I've worked with owners who have had line of credit for years, but only touched it when things got really urgent. That's the worst time to use capital. Urgency kills leverage. It limits our negotiation power. It forces reaction instead of strategy. Compare that with a client I'll call Diane. Six months before she needed capital, she cleaned up her financials, she strengthened her lender relationship, and mapped out exactly how she'd deploy funds. When a competitor went off for sale, guess what? She was ready. She moved in weeks, where her other competitors were still getting organized. The most successful businesses owners don't look for capital when they need it. They prepare early so capital is available when the opportunity shows up. So, access to capital just isn't about approval, it's really about relationships, preparation, and understanding your options. Becoming the kind of business capital floors toward, not one that chases it.
00:06:59.570
Kalimah White: Hmm.
00:07:01.790
Cathy O'Malley Kearney: Really appreciate that perspective about building a relationship that attracts capital rather than seeking it. So, you know, along these lines, you build a path to that capital. Sabrina, talk to us a little bit about. Why, in today's age, sometimes these financial conversations still seem intimidating for so many women.
00:07:29.070
Sabrina Webster: I want to start with one support… one significant, important item. If financial conversations feel intimidating to you, it's not a reflection of your intelligence or your capability. For many women, it's about exposure. Historically, we weren't always in the rooms where money decisions were made. And when you don't see people, like, navigating those conversations with confidence, it can feel you're entering somebody else's world. Then layer in the jargon. debt service coverage ratio, EBITDA, leverage, any acronym, really. Ratios, technical language, and the message becomes, this… this isn't for you. But here's the truth. Confidence doesn't come from knowing everything. It comes from understanding enough to engage. These conversations aren't tests, they're dialogues. And the moment you come in curious, asking questions instead of trying to be perfect, everything shifts.
00:08:30.270
Cathy O'Malley Kearney: Great. Salima, anything you'd like to add? I love the way you laid that out.
00:08:35.970
Kalimah White: Yeah, no, I mean, I think just adding as to what, you know, Sabrina said, it's… you know, I mean, she's describing barriers at the door, right, that we are all so very used to dealing with as women. Right? But, you know, what we've seen is that once women get past that door, you know, they become extraordinary, extraordinarily intentional and strategic, right? And so, you know, like Sabrina said, when we're walking, you know, when we're working with these financial conversations, and we grow our understanding, we're not looking for perfection, we're not, you know, looking to know everything, we're walking in with curiosity. asking questions, asking good questions, right? And so, you know, like I think Sabrina mentioned, making sure you're having a relationship with your advisors that are educating you. Right? And not just transacting business. And so, you know, I've seen, you know, women transform their relationships with money when they found someone who really took the time to explain and not just execute, right? You know, that shift from, you know. intimidating conversations to being empowered, even when you're using a whole bunch of acronyms, right? And it doesn't take years for that to happen. Sometimes it can take, you know, one really good conversation, so… you know, financial conversations, they really should feel collaborative and not overwhelmed. And so I think that, you know, having the advisor that you connect with, that you can feel comfortable asking these questions is very important as well.
00:10:11.770
Cathy O'Malley Kearney: Excellent points, and what I hear there is find an advisor that will have those conversations with you, because it's the… like anything else, it's practice. In the course of these conversations, you learn and you become more comfortable, so excellent points. Let's… let's continue down that path. Sabrina and Kalima, what is the one thing that you wish women understood about money, growth, or banking relationships sooner?
00:10:42.530
Sabrina Webster: If I could give one piece of advice early on, it would be this. Your banking relationship is a strategic partnership. It's not a transaction, and it's not a last resort. Too many owners call their banker when something's feeling urgent, but relationship equity is really built over time. Your banker needs to know your story, know your vision, know your ambitions, know your goals, before you need the capital. Because when you need the capital, it's not the time to introduce yourself. Lenders don't just assess the numbers, they assess confidence. And confidence grows through familiarity, transparency, and consistent communication. Even when things aren't that perfect. Klima, what would you add? to that.
00:11:29.470
Kalimah White: Yeah, no, I would definitely, you know, add to that, making sure, like you said, having those relationships, right? And really looking, like you said, at, you know, like I said before, as money as a tool. Right? You know, as a tool to increase those strategic partnerships that you have, you know, with your advisors and with your… with your bankers as well. And so, you know, that's why it's really important to really look at it, You know, from the perspective of servicing, you know, not only your business, but your life, and so you have to think about, you know, maybe… maybe we should have a financial wellness review. Right? Or a small business wellness review. So, you know, which can be very transformative to a lot of clients, right? It gives you a… structured moment to step back from the day-to-day and ask, you know, where am I right? You know, where do I want to go? what am I using my money for, my capital, my credit, my cash flow? You know, do these things actually align with my goals? So I think that it's, you know, very important for
women to, you know, to understand using money as a tool, being strategic, intentional, like Sabrina said, making sure you have deep relationships with your, you know, with your bankers as well, so that throughout the life cycle of your life and your business. You're able to, to cultivate that strategically and intentionally.
00:12:59.440
Cathy O'Malley Kearney: As you… as you both were describing, how to develop that relationship, I was reminded of something a mentor once said to me about making sure to take time to work on your business, not just in your business. And that's what I… that's what I hear you both saying. And so, Sabrina. What is a common myth about access to capital?
00:13:24.350
Sabrina Webster: That's a really good question. The biggest myth I hear is this, that you have to be perfect to qualify. You have to have the perfect financials, the perfect history, absolutely no rough quarters. It simply isn't… it isn't true. Lenders don't look for perfection, they look for a story. Consistency. What are the trends? Evidence that you understand your numbers, and that you can manage your growth. or even sometimes manage through a rough time. We all got through COVID, didn't we? A hard year followed by recovery isn't a red flag. We call it resistance, or resilience. Resistance, sorry. Preparation matters most than perfection. If you're willing… if you're waiting for everything to look perfect, stop waiting.
00:14:11.810
Kalimah White: Yep.
00:14:12.280
Sabrina Webster: start preparing. Only one of those gets you closer to the capital that you deserve.
00:14:17.880
Kalimah White: Hmm.
00:14:18.660
Cathy O'Malley Kearney: Okay, so show a continuing trend. Yeah. Or consistent performance. Great. Kalimah? What are some important steps that women business owners should take to maximize the long-term value of their business while continuing to maintain control and flexibility for the future?
00:14:40.330
Kalimah White: Right, that is… that is an absolutely great question, and something I'm… You know, really… deeply passionate about, because I really love the maintaining control and flexibility. I think those are the two things that business owners that I've worked with love more than anything else. You want to be, you know, be in control of everything, but have flexibility at the same time. So I think that that is, you know, definitely great. you know, I… like I said, you know, I think that decisions that… A lot of business owners make today, you know, determine what's possible for the next 5 to 10, 15 years from now. Right? So… The earlier you start thinking about that. really, the more freedom you create for yourself. And so, I think a lot of times, people think that, oh, I can put that off till later, put that off, you know, till later, when, you know, thinking about these things simultaneously, like you said. Cathy, working on your business instead of just, you know, in your business, right? So thinking about these things, you know, earlier, and it really starts with one fundamental and foundational mindset shift. you know, beginning with the exit in mind. And when I first heard this term, which is a, you know, term in exit planning, happens a lot. you know, I was like, that doesn't make any sense, right? But, you know, to be clear, that doesn't mean that you're leaving or planning to leave your business tomorrow. It really means you're building a business today. that gives you real choices in the future, right? A business that you control, you know, rather than one that controls you, which I know happens to a lot, you know, a business owner. So. you know, I was working with a women business owner, you know, for, you know, I'll call her Michelle, right? Who built a, you know, a really successful professional services company, right? The revenue was strong, you know, clients loved her, her reputation was excellent, excellent. You know, but when we started talking about her long-term goals and what the business would look like without her daily presence, something really became clear. The business was Heavily, very heavily dependent on her personal. She was the rainmaker, the relationship manager, and really the face of the brand. Which isn't uncommon, right? That's not really a failure, that happens, you know, a lot. But it does mean the business had a ceiling on its value and the transferability of the business. Right? A buyer, or a partner, or someone else, or successor is looking at that, and looking at the business being so dependent on the owner, you know, really sees it as a risk. And what we don't understand is that it reduces the business value, right? So one of the things we were able to help her to do was sort of, you know, shift that focus, right? Instead of just growing the revenue. we started building enterprise value, right? So here's what that looks like in practice. Strength… strengthening that leadership team. You know, Michelle, you know, she identified two high performers internally Invested in their development, gave them expanded responsibility. this reduced The dependency on her. And one of the most common and most costly gaps in business value is dependency on the owner. Document and process is something that is so very, very important if you're looking to scale your business, right? Everything from client onboarding to project delivery to billing. You know, it sounds pretty straightforward, but, you know, it's really powerful. When you turn that institution… institutional knowledge. That, you know, that you're… that the people who work there have, as you have. into repeatable systems. Like I said, that's how you scale, right? And it makes it really attractive for future buyers, because they're able to take what you have with regard to your processes and use them as well. cleaning up and clarifying the financials, right? I think Sabrina had mentioned this. before. And it's not just something that's done for tax season, right? Because when you're thinking about what you're looking to do in tax season, you're looking to reduce the value of your business in order for… to pay less taxes, right? And we do this all legally, we, you know, something we do here at Key. But if you are looking to sell your business, you are trying to increase the value of your business, right? Increase that enterprise value. So, you know, you really need to be and understand where your business is. Right? Understanding margins by service line, you know, identifying what's actually driving your profitability. You know, data, data, data is the name of the game nowadays, right? I'm trying to really, you know, create consistent reporting. that really tells a clear story. Transparency and financials and building that credibility with your stakeholders, your lenders, your partners, it's very, very important as well, and it makes you very, very attractive to buyers. Aligning legal, tax, and succession planning is something that's very near and dear to my heart, right? We have to look at the ownership structure and make sure that that works for what you're looking to do when you are selling your business. Trust planning, estate planning, very, very important. Being able to transfer that to the next generation of what you want to do in a very tax-efficient way is very, very important. So, like I said, when the time's come for you to make a move, whether that is to the third, third, to the next generation, or whether or not that is to a third party, you have options, and like Sabrina said, not urgency. You're not doing this because you got now an unsolicited offer from someone, and now you're scrambling. you're planning in advance, and so it's a very, very powerful And I think, you know. one of the great things that, you know, this business owner, Michelle, really liked was that she didn't give up any control. Right? You know, in fact, she had more of that. things were documented. People, you know, there were people in place actually, you know, also gave Freder some time to do other things, right? Because when you build systems, develop talent, you know, maintain clean financials, you know, you're sort of free to lead your business and not trapped in it, meaning, you know, working. All the time with regard to your business. So I think, you know. Asking yourself, if I stepped away in 90 days, what would happen? You know, and the answer there will tell you where to start. You know, get your numbers right, not just for the bank, but for yourself. Know your revenue trends, your margins, your cash flow. You know, document processes and develop your team, very important. And build your advisory team, making sure they're talking to each other, your banker, you know, your CPA, your attorney, your financial advisor, they all Have a piece of… your business and your life, and making sure that both… that all of your advisors understand their pieces and the other advisors' pieces is very, very important as well. So, okay, I'll stop pontificating. Like I said, I really enjoy this section, and I'll keep you talking forever, so…
00:22:10.770
Cathy O'Malley Kearney: Alima, I have to say, I think I heard 4 or maybe even 5 actionable items there that, not only helped, perhaps, prepare a business for a transition down the road, but sounded like activities that would add value and scale to the business Sooner than that, and perhaps some quality of life for the owner, so…
00:22:33.070
Kalimah White: I think we're.
00:22:33.580
Cathy O'Malley Kearney: All about that, right?
00:22:35.250
Kalimah White: Indeed, indeed.
00:22:36.870
Cathy O'Malley Kearney: Sabrina, if, in the case that we see a business that is growing faster than expected, what is the first conversation that should happen then?
00:22:50.280
Sabrina Webster: Absolutely. You know, growth is so exciting, and I never wanted to diminish that, but unmanaged growth, that's where businesses really get into trouble. The first conversation should be, what's the infrastructure that we have to support this? Infrastructure is way more than just capital at hand. It's your operations, it's your staffing levels, it's supply chain capabilities. And it's really about cash flow timing. I've seen it happen so much when a client wins a large new piece of business, which could be a game changer. They're all excited about it, and they just want to go at it. But without the proper planning and structure and access, owners of companies sometimes have to fall on using their own personal funds, whether it be credit cards or loans with higher interest rates. Really just putting them into a credit position that they
don't necessarily want to be in, and this is where the profitable business Ends up running out of cash because the growth wasn't funded properly. The lesson is really simple. Bring in your advisors early. Kalima just said it. Rule of thumb, your commercial bankers, your financial advisors, your CPAs, your lawyers. And sometimes you might have, you know, a board member that you're close with that you can, you know, talk to and get ideas from, but it's really, really important to bring them in earlier versus later, because we, as trusted advisors, can help these business owners pivot. It, you know, planning isn't slow growth… it doesn't slow growth at all. It really, really protects it.
The goal is sustainable growth, not just fast growth.
00:24:38.250
Cathy O'Malley Kearney: Great. So, so…
00:24:40.060
Kalimah White: So, Cathy, can I just add to that real quick? I'm just going off… going off script a little here, but I just wanted to add, you know, I mean, I think that grow… having your business grow, quickly and growing longer than you expected is something that you need to look at on the, you know, commercial side as well, but as well as on the personal side, right? Because people don't understand, when your business is growing, that is an asset that's appreciating, appreciating, and then, you know, you haven't done any estate planning, next thing you know, a business that was, you know. started out at, you know, $2 million is now $50 million, and now you have a taxable estate that you haven't thought about. And so now, you know, working with advisors early, and I will… I think this is the theme that we have here, right? Early, early, early.
I'm working, you know, what advisors early really gets you to the point of understanding that you have to, You know, you have to plan in advance to have the freedom that you need. So, okay, I'll stop there.
00:25:40.900
Cathy O'Malley Kearney: Oh my god.
00:25:41.790
Sabrina Webster: Great.
00:25:43.170
Cathy O'Malley Kearney: I think it's an excellent point. I can't tell you the number of business owners I've met who have said, wow, I, you know, I spent so long just working on this business, I never imagined it would be worth. 50 or 100, or $200 million, so I think that's a… that's a great point. Which leads us to our next question. How does that preparation each step of the way, help… help us build confidence?
00:26:09.510
Kalimah White: Hmm.
00:26:10.250
Sabrina Webster: Sure. Preparation, in my opinion, removes fear of the unknown. When you don't know your numbers, you haven't walked through your options, and you're just walking in for the best. That's kind of where anxiety takes over. But preparation changes when you, the business owner, show up. You're not reacting, in my opinion, you're leading. And people across the table can feel the difference immensely. Preparation turns high-stake moments into a strategic conversation, and that's where confidence becomes natural. I've been at a table where business owners have not been prepared, and, you know, it brings anxiety to me as a trusted advisor, trying to get them the capital or what they need. But then I've got clients that come with, you know, a projection, you know, of what their cash position's gonna be in the next, you know, 6 to 13 weeks, and they know what their need is, they think that they have an idea of where they're going, and they can tell me that story. I see that confidence. So, that's what I encourage everybody to do, is to Be prepared.
00:27:23.540
Cathy O'Malley Kearney: And it sounds to me like… many… I think all of us on this call might know some of these things, but really putting them down in writing in a formal substantive format adds that value, right, to the preparation, Sabrina?
00:27:42.130
Sabrina Webster: Yeah. Great. For sure.
00:27:44.480
Cathy O'Malley Kearney: And Kalima, I'm certain you have thoughts on this.
00:27:47.560
Kalimah White: No, I have thoughts, Cathy! So, you know, I… you know, in thinking about this, I mean, I love what… what Sabrina said, in the sense of, you know, said, you know, it brings, you know, that confidence, and then also, too. You know, we always think that it makes… it changes how
Others see us, but it really changes how you see yourself. Right? It's that inter… internal shift that you have that that confidence brings you, you know, when you understand, or you know, or you also feel like, I am confident in the fact that I do not understand this, but you know what? I have some really good questions, and I have really good advisors who are going to help me. Right? So when you've done the work, you know your numbers, you know, you understand your business value. Right? You've thought through your goals, and you're just not, you know, reacting in the room. You're making decisions, you're leading the conversation instead of following, right? That is sort of a fundamental shift, and I think that I think about a client who I worked with who, you know, sort of described herself as someone who always felt a step behind in financial conversations. You know, she was very smart. She was performing well in business, but she really never invested time in understanding the full financial picture. You know, but going through statements and building sort of a plan, right, of her key metrics and mapping out, you know, what she wanted to do over the next 3 years, Cathy, like you said, you know, Sabrina, having that plan. builds confidence, and then you can always refer back to it as well. And so the next time, you know, you're meeting with your advisor, your banker, you know, your lawyer, whatever that is, you're driving the agenda, because you know what you want. And so… I think that that makes it, you know, makes it… makes you feel so much better. in what you're looking to do, and how you're looking to frame the conversation. So, you know, preparation, like I said, preparation turns what, you know, feels like you know, something very nerve-wracking into a collaborative strategy session, right? And you walk in that space, you're feeling confident, you know what you need, and you know what you want, and then you're open to also getting good advice from good advisors, and… because you're asking the great questions. So I just… I just think it's great.
00:30:12.080
Cathy O'Malley Kearney: I particularly appreciate the point about driving the agenda, even if it's with your questions.
00:30:18.280
Kalimah White: Yes.
00:30:19.300
Cathy O'Malley Kearney: That gives you a sense of empowerment if you say, I know X, Y, and Z, but I have a question on this, and I know it's a fair question because I've prepared, right?
00:30:29.330
Kalimah White: Exactly.
00:30:30.340
Cathy O'Malley Kearney: Wonderful. Great, great points, ladies. I know that, we have a few questions that we've received in advance. I think we're going to move to those, but perhaps we should start with some of the questions we have in the chat, if that works. So, let me see here…
So, I will pose this question, Sabrina or Kalima, you tell me, which one of you wants to take it. The question is, how… what is the time frame of a relationship with a bank that should be sufficient to start seeing capital opportunity… opportunities. Six months, 1 year?
00:31:21.310
Sabrina Webster: I guess I… I can… I can start, and Kalima, you can… you can add on to it as you see fit. I really think, you know, it's not necessarily a timeline, per se. You know, I think a lot of the discussion that we've had here today is to become… go prepared to the bank with as much information, you know, your business history, financial statements, if you have them with it. So, you know, it's really building that story. And really understanding what your question… or what your financing request might be, or what your capital need might be. So I don't necessarily think it's how long you've had a relationship necessarily with your banker. It's really about being prepared, knowing what… what you need, and how to ask of it, and let your banker or advisor or planner, help you be able to strategize through that request.
00:32:19.010
Cathy O'Malley Kearney: So it's… so it's really less of a, comfort with the formal request, and more of a comfort level you've built in expecting your… your relationship manager or your banker to kind of… to help you prepare for that ask, and to help you decide when it's… when the right time It is to ask.
00:32:38.740
Sabrina Webster: Sure.
00:32:40.030
Cathy O'Malley Kearney: Good, good. So, we have another question, and Kalima, you've touched on this a little bit, but I. I think you probably have something to add here. So the question is, for business owners, and I think this is many, whose wealth is closely tied to their company, what are the key considerations they should keep in mind when thinking about risk, diversification, and long-term planning?
00:33:06.030
Kalimah White: You know, that is… that is a great question, and I, you know, and I think that even thinking about this now, right, in the sense of, you know… I mean, most business owners and a lot of them have about, you know, 80 to 90% of their wealth, tied up in the business, so they don't have a lot of liquidity, right? So sometimes, in some situations, when they're looking to work with a wealth manager or something of that nature, they are not, you know, in the situation of being able to give a whole 5, 10 million dollars of cash and liquid assets for them to, to manage. And so, you know, working with And thinking about, you know, the different advisors that you have to have, and being able to, one, you know, work with an attorney who is able to structure your business in the way that you, you know, need to, whether that's in, you know, an S-Corp, whether or not, you know, you are, you know, working as a, as a, you know, under an LLC. you have to think about that part of it as well. You have to ensure that you are thinking about the appreciation of your business, right? Because we start businesses so that we can grow them. And when we are growing our business, like I said, we're really not thinking about, sort of, you know, what that next step is, but if we start with the end in mind and say, okay, you know, maybe we do need to think about some type of, you know, irrevocable trust that we can use to…
hold our business assets. Take those business assets out of our estate as those assets are appreciating. If you're using some… if you're using an irrevocable trust and you're in, you know, a jurisdiction That doesn't allow for you to control those assets as well. You can move that… your type of trust or your reputable trust to a jurisdiction that allows… that allows for directed trust, like in New York. They don't allow for directive trust in New York, a trust where you can bifurcate the duties between an investment advisor and a, you know, a trustee. So something like that, if you need an irrevocable trust to get these assets out of your estate. you can go to a jurisdiction like Delaware, go to a jurisdiction like South Dakota, who would be able to, have those types of directed trust planning. So I think working with advisors and sort of, you know, understanding, you know, what you have and what you need is very, very, important as well. And planning for the long term, right? Because, like I said, we're looking to build businesses that can grow and, you know, and prosper without us one day. And then, when we sell those businesses, you know, we are able to have assets to be able to, you know, help our family live through generations, and trust planning helps with that.
00:36:06.790
Sabrina Webster: And I want to add on to that a little bit, and I think that this is one thing, and it's definitely a plug for KeyBank here, is that, you know, the commercial bank and key private bank have a relationship together, and when you're a trusted advisor to your company, and, you know, the question was, is. what do you do when your wealth is tied to the business? Having the two partners in the same conversation is always really helpful.
00:36:33.570
KalimahWhite: Good point.
00:36:34.430
Sabrina Webster: Because you can have your commercial banker give you the commercial perspective and the impact on that business, and what it needs to, you know, to be where it needs to be, and then also get you to personally, where you want to be. So I think that that's one good thing that the bank really does, and we really, collaborate well with.
00:36:58.980
Kalimah White: One key back?
00:37:00.890
Cathy O'Malley Kearney: Yes.
00:37:01.590
Kalimah White: Excellent point, ladies.
00:37:04.090
Cathy O'Malley Kearney: And it may be hitting those financial goals before you're ready to sell the business, right? Making sure you have a good.
00:37:09.200
Sabrina Webster: Yes. Yep.
00:37:10.990
Cathy O'Malley Kearney: So, I know we have a number of other questions, but I want to take a moment… I think that, Rachel, you had a PSA for the group, didn't you?
00:37:23.490
Rachael Sampson: I do… I do. Thanks so much, Cathy. So I just want to make sure, before we hit the top of the hour… actually, I have a couple questions for the team, too, if you don't mind.
00:37:34.630
Cathy O'Malley Kearney: Great.
00:37:35.000
Rachael Sampson: It's to just remind everyone, and… Thank you, one, for the conversation, this has been super helpful, but two, if you are not a Key for Women member, please make sure you go to key.com forward slash women, or go to key.com forward slash joink for W to enroll. Also, be sure to mark your calendars for May 13th. We'll be joined by a certified coach and best-selling author, Jamie McKinney, who I have met in person, she is phenomenal, for another impactful session on growth, confidence, and taking the next step forward. So, you all have had this wonderful conversation. One of the things that I would love to dig into, too, is
What about products-based businesses versus service-based businesses? Do you think about those two things differently at the end of the day from accessing capital to transitions? Are there anything to consider?
00:38:30.220
Sabrina Webster: Yeah, I… for sure. In terms of products and services for services-based business, each business operates differently, their needs are different, their… their need for capital is different, their need for potentially payment services might be different, and in terms of payment service, what do you… what does that mean for the greater group? The ability to manage your cash in the bank, you know, what products and services are available, to our clients that help them manage that cash and help their business. That's… that's what comes to mind in terms of, like, the products and services pieces of Key, but each of the businesses for the commercial, they operate differently, and so we'd have to have those good discussions with your bankers.
00:39:16.080
Kalimah White: Again. So, yeah, and transitioning, you know, a business, depending on whether or not it's, you know, an asset sale or a stock sale, you know, is very important as well to think about, right? And so, you know, if you have a lot of products, and you, you know, and you're a product-heavy type of business. you know, you probably may be looking more for some type of, you know, asset sale as well, along with the assets that come along with your business. Stock sales may be a little bit different in that sense, so I think those are things to consider as well.
00:39:50.570
Rachael Sampson: I love that. Last question, and Cathy, I'm turning it back over to you. Thank you all for entertaining my question, is how do you think about that on the smaller scale? You know, we talked about, you know, on the commercial and the private bank, but are there other relationships, and while we would love everyone to be with KeyBank, because yes, we are that relationship bank. you know, how do we think about the relationship? Is it… does that only happen in the upper end of the market, or is that kind of a continuum? Can you talk about that? And that's my last question, and Cathy, it's back over to you.
00:40:21.700
Cathy O'Malley Kearney: Okay.
00:40:23.670
Sabrina Webster: Yeah, I… I can kind of… I can speak to that as well. I, you know, I think whether you're… you're big or you're… you're small, you know, banking relationships are very, very important. You know, we maintain great relationships with our retail folks on the consumer side and in the branch side. You know, smaller clients tend to work with the branches a lot more. But the branch personnel, you know, for KeyBank, they know what they're doing. They have access to different things and opportunities that smaller businesses have access to. They have relationships that they can guide some of the smaller businesses to. Like, for example, in New York State, we've got the Small Business Development Corporation that, you know, the banker and that corporation could partner with, with a company that's potentially starting up. So, absolutely, We can go from as small, you know. Accounts all the way up to the big accounts for the sophistication.
00:41:24.670
Cathy O'Malley Kearney: Excellent.
00:41:25.630
Kalimah White: Definitely the same on the wealth side, right? Yeah. In the sense, yeah, in the sense of working with our, you know, private client, and then working with our private bank as well. You know, so yeah, I think that we all need levels, right? Because we work with clients on every… you know, level of the spectrum. So I think, you know, having those levels within all… and within wealth and within commercial as well helps us be able to, you know, help all of our clients.
00:41:52.990
Cathy O'Malley Kearney: Wonderful. Well, we have a number of questions that are asking for some very specific information on the topics you've touched on today. So, Sabrina, I'm going to start with you on this first question. What financial documents and performance metrics do lenders rely on most? And how far in advance should an owner start getting bank ready? I know you've gotten a part of that, but I think the first portion of this, that's a provocative question.
00:42:21.750
Sabrina Webster: Sure, I think, to your point, it's a great question in that one really gets to the heart of being bank-ready and what it actually means. Let me walk through this a little practically. At minimum, lenders would want to see a profit and loss statement. a balance sheet statement and a cash flow statement. Typically. the last two to three years, we like, and potentially, ideally, year-to-date as well, and we look at that, over a comparative period, meaning how was your first quarter of 25 compared to your first quarter of 26, and how is that trending over the next year? Again, I think it's relationship building and having those conversations with With your lender, you know, talking about what do you think your projection is going to be for the end of 26, and what have you. And a lot of times, the bank would want a business and a personal tax return for those same periods taken all together into your financial story, and this is your document form, but beyond the documents. some of the key metrics that the bank might be looking at at revenue trends, are you growing? Are you flat? Are you declining? How are the margins? Sometimes we've seen companies with, you know, a drop in revenue, but guess what? Their margins are up. Why? Because there's some sort of story. You know, either the company decided to eliminate The non-profitable companies, so their revenues went down, but their profit margins actually improved? that's… that's a positive. They want to understand the trajectory and not just the moment. And not just your top line, just to my point earlier. is your business generating sustainable earnings? This is another thing that we look for. And one of the most critical metrics that, you know, we look like, and I look at in my world is called a debt service coverage ratio. Meaning, does the business generate enough cash flow to repay any loan… loan payments that they might have, or any fixed other charges that they have to have as well. It's not just You know, some companies might not have, or may have other debt, or may have other fixed charges that they have to pay for in addition to the loan payments that they have at KeyBank. But the practical guidance that I could give everyone, you want to be bank-ready 6 to 12 months. before you'll need the capital. And that doesn't mean spending all of your time in spreadsheets, it's just having that relationship with your lender and keeping your books clean and current, and be able to tell the story.
00:45:05.740
Cathy O'Malley Kearney: Okay, good. Very, very actionable items there. And another, another specific question here, how should owners think about debt versus equity versus using cash reserves?
00:45:19.630
Sabrina Webster: Sure, I think that this is one of the most important questions a business owner could ask. The honest answer is it really, really depends. It's not just to dodge, it's the truth. Because the right answer is almost a combination aligned with your goals, your risk tolerances, your stage of growth, there's a simple framework. Debt, meaning bank loans, lines of credit. Small business association financing, we call it SBA financing, lets you access capital while retaining control and ownership of your business. Whether you repay it with interest, it's a known manageable cost. When you get to equity, on the other hand, when you're bringing in different partners and or investors. Providing you with the capital without any repayment pressure.
It becomes a cost, because you… you may have to give up some ownership, often degree of some control, as well, when you're talking about equity. Equity can be the right choice when the capital needs are large, but you really want to make sure you are bringing in the right investor with you and your business, and understanding the vision of where you want it to go, and they have to be aligned. Cash reserves, meaning using your own retained earnings, preserve independence, and they both avoid dilution and repayment. But they also can reduce your liquidity and flexibility if something unexpected arises. The most sophisticated owners don't think in either-or terms. They think in layers. They use debt for operational growth, they maintain cash as a buffer, they consider equity strategically only when the opportunity and the partner are both right, to my… to my statement earlier. The right answer, really, it's all about balance and being aligned where you are and what you're trying to accomplish.
00:47:16.180
Cathy O'Malley Kearney: Great points. Thanks for that. Kalima, I'm going to jump to you for a minute. This next question from a listener, how can borrowing support both business growth and personal financial goals?
00:47:32.470
Kalimah White: Yeah, so I made, you know, I think that… The idea that business strategy and, you know, personal financial life go together badly, right? It's very important for people to underst… business owners to understand, right? There's… I mean, there's really no silos in that situation, so you have to think about those things, you know, together, and like I said, too often business owners, they're laser-focused on growing their business, and You know, and that's admirable, of course, but, you know, they haven't thought about the… how the business is serving them personally. Right? And if you're not really careful, you can build a very successful business and still, you know, not find yourself unprepared on a personal level. I think I saw something in the chat Where it said that, you know, someone said about, you know, 1 to 5… it's a statistic that Key had, that 1 to 5 small business owners have no retirement savings at all. Right? Like, that is something that is very, you know, concerning, and being able to work, you know, with an advisor, to assist with that is very important, and also borrowing strategically to assist with that. It's also very important, and, you know, and like.
Sabrina said, being able to, you know, to have this strategic borrowing that you're doing, you know, can really accelerate both the business growth and the… your personal life, right? Because the more assets you have in the business, you know, there are ways to be able to pay yourself, also be able to get, you know, some type of, maybe, IRA that you… a SEP IRA or something like that for your business as well, that you can really prioritize. that… retirement planning that you're, you know, that you're looking to do. So, he said, the goal really is to grow your business and your personal balance sheet at the same time, right? You know, not really sacrifice one for the other. So, you know, working with advisors to help you figure out Ways that you can plan for that retirement, and not just wait for that liquidity event. you are planning for the retirement at the same time, and then if you're in a situation like Sabrina said, of, you know, being able to you know, maybe you do need to sell some equity, you know, in that business, you're able to then use those funds to be able to, do other things for yourself that you need. So, it's, you know, using Borrowing strategically. And intentional is very, very, very important.
00:50:06.660
Cathy O'Malley Kearney: So sometimes we need to make sure that we have advisors lined up who will force us to put ourselves first. Right? So we are not left without that retirement savings or that personal cushion.
00:50:18.170
Kalimah White: Very true.
00:50:20.100
Cathy O'Malley Kearney: Great. So, Sabrina, we have a really interesting question for you next.
00:50:25.710
Sabrina Webster: Okay.
00:50:26.670
Cathy O'Malley Kearney: What are the most common red flags that first-time… for first-time borrowers that slow down approvals, and what practical steps can we take to fix them?
00:50:39.360
Sabrina Webster: I really, truly appreciate this question, because honestly, all red flags, I think, can be fixable. There's no doubt about it. I think the most common red flag that we see is inconsistent financial reporting. When your books don't match your tax returns, and your revenues aren't reconciling cleanly. it creates a little bit of doubt for the bankers. Lenders, you know, don't just need your numbers to be good. They wanna… they wanna believe you, they wanna… they want them to be trustworthy. I think the second, red flag is poor record keeping.
Commingled… we just talked about this a little bit earlier, commingling personal and business expenses, missing documentation, invoices that don't match your deposits. they signal risk for the bank, and not just the lender. And, you know, obviously to your advisors, you know, we're the ones aligned with the client, we're aligned with our credit folks, we know the stories that have to be told, and if there's that inconsistency.
you know, it could be considered, like, a vague use of funds. Sometimes. we'll get the question, oh, I need $200,000 to grow my business. And I'll ask, well, what is the $200,000 going to do? And if they don't have a plan for that use of funds, it kind of…You know, raises… raises a flag. But there's some good news. All of these are pretty much fixable. Obviously, we've said it over and over again, we gotta have a good bookkeeper, potentially a chief financial officer, depending on the size of the business. But somebody to keep those record-keeping items intact, and if you haven't already, understand, you know, if there is a credit request, what are those funds going to be used for? So I… I like to show a little box of sources and uses that be able… that is able to tell the story as to how those funds are going to be deployed. And, you know, if you talk to your banker on how to apply. I would… I would really suggest doing it well in advance, not when I'm creating an overdraft in my checking account, and I need… I need some money. Those are… those are harder to… those are harder conversations to navigate, for sure. And obviously, communicate, communicate, communicate. It fixes it pretty much a lot of the times.
00:53:18.330
Cathy O'Malley Kearney: So, another good reason for starting earlier, so you can see if there are any… any manners you need to clean up. In the spirit of thinking about, personal and business finances, the next question asks, what should business owners know about personal guarantees and collateral?
00:53:38.430
Sabrina Webster: Yep. that comes up a lot, too, in terms of personal guarantees, because you're like, oh, you know, it creates some anxiety to the business owner, but really, I think a personal guarantee in the way we view it, it's a serious commitment. You know, if it's a secondary or third primary… source of repayment if… if you… you get there. But, that being said, younger businesses will typically have those personal guarantees, while, you know, more mature businesses, those personal guarantees might fall off. It basically tells the bank that you're standing beside your business and, you know, providing that guarantee. There's other things that lenders take into consideration in terms of other collateral. We typically would take an all-asset lien filing. And those are standard. Any bank would… any bank would require those. And then, obviously, the third prime source of repayment would be a personal guarantee. It lets lenders know that you have some skin in the game. So, that's how we view it.
00:54:51.290
Cathy O'Malley Kearney: Okay, great. We just received a question in the chat that I think aligns to organized record keeping that you were talking about, Sabrina. So, for a small family-owned business, what software do you suggest for good record keeping? Is there a software provider that banks prefer?
00:55:12.750
Sabrina Webster: We see all sorts, whether it's, you know, a lot of, a lot of times, you know, they use QuickBooks for your, for your reconciling of your balance sheet and your income statement. A lot of times, from a cash management perspective, depending on the industry, it really… what they call, a cash management system. those vary by industry, and they could be specific. Like, a healthcare plan might be different than a manufacturer system. So, there's not really… I wish I could say exactly one system, but it varies really depending on the business.
00:55:54.020
Cathy O'Malley Kearney: So it probably… the recommendation is probably to explore one that relates to your type of business, whether products or services, and choose a system that is tailored for that type of a business.
00:56:09.710
Sabrina Webster: Yes, and absolutely, not only just explore on the outside, but you know, you could also, a lot of the CPA firms that you're working with, they encounter many different systems that they work with and can have some recommendations as well. Again, it's really that partnership between your banker, your CPA, and your other advisors.
00:56:28.980
Cathy O'Malley Kearney: Okay, okay, so it would be good to… to have a conversation with those two parties. Great. And then our last question, Kalima, is going to you. With planning for a future transition. How early should capital planning start?
00:56:48.180
Kalimah White: the earlier, the better. I mean, like we said, you know, starting with the end in mind. When you're starting a business, it's really important for you to think about how you are going to scale it to transfer it, because the one thing we know is that none of us can take a business with us, right? Like, we're all going to go without the business, so we need to know, you know, where that is You know, going to go, so… You know, really thinking… and, you know, if you didn't do that in the beginning of your business, and now your business is, you know. 10, 15 years old, you're really thinking at least 3 to 5, I would say even more. 3 to 5 to 7 years before you were looking to sell, right? So, you know, I had a client who had this issue, had a manufacturing company, wanted to wanted to pass it, you know, to her children, right? And also, but she wanted to create some liquidity for her own retirement. Right? So there were things in that, you know, you want to give it to your family, but you also want to have some liquidity. So we were able to structure a partial, you know, buyout for the children as well. Right? And so, you know, when you're doing this internal, you know, buyout where the two children, there were two children in the business that were active, you know, gradually got ownership, we were able to structure that in a tax-efficient way, you know, as well. And, you know, in doing that gave…
that gave the business owner some liquidity as well. So, you know, really, the more time you have in advance of a transition, the more options you have in one being able to create tax efficiency for yourself, being able to structure it in the way that you want it to, whether or not you want it to pass to the next generation, or sell it to, to a third party as well. So, you know. you have to think about this transition as, you know, not just a transaction, right? It is something that integrates the business as well as your personal financial legacy. So thinking about it like that and really making sure that you are planning in advance is important.
00:59:01.970
Cathy O'Malley Kearney: Wonderful. So, I think that what I hear there is… As soon as possible, but a minimum of 3 to 5 years.
00:59:10.650
Kalimah White: A minimum, a minimum, to really have options. I mean, if you're… if you don't, you can still come to us and we can help you. But, you know, but probably… we probably could have did some things for you a little better 5 years from then.
00:59:23.220
Cathy O'Malley Kearney: Great, great. Well, ladies, that takes us to the end of the questions that were submitted before, and the questions that are in the chat. So, Rachel, I am going to turn it over to you.
00:59:38.010
Rachael Sampson: Well, great. I think it was a fantastic conversation. Thank you so much, Cathy, Kalima, and Sabrina, for your expertise and insights. I know the chat was busy, we've got a lot out of it, and the teams and texts are going, so great job. Thanks so much to everyone for joining today. Again, if you're not a Key for Women member, please go to key.com slash joink for W. The recording will go out to all those that have registered in about a week or so, so stay tuned and join our next webinar. Take care.
01:00:08.730
Cathy O'Malley Kearney: Take care.
Grow your business with the right capital strategy in this on‑demand webinar replay from part three of the Key4Women and Key Wealth Women in Wealth Series. This virtual fireside chat features insights from Cathy O’Malley Kearny, Kalimah White, and Sabrina Webster on smart lending, access to capital, and how to prepare for productive conversations with a banker.
Key Takeaways
- How lending fits into your overall financial strategy
- Common misconceptions about borrowing
- How thoughtful capital planning can support confident, long‑term decision‑making
Let's Work Together to Achieve Your Goals
For more Key4Women resources to help you reach your goals, visit key.com/women or email us to learn more.
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