Written by MARK RILEY
The Business Journal asked Mark Riley, market president for Bank of America in the greater Central Valley, for his thoughts on family businesses and how the banking industry can lend a hand. He also shared some of his personal favorite family businesses.
What impact do family businesses have in this market?
Many family businesses are also small businesses, and a recent report by the U.S. Small Business Administration found that small businesses generate approximately 44% of all economic activity in our country. Living here in the Central Valley, we know that family-run businesses of all sizes are literally the lifeblood of our local community, and our teams at Bank of America have a very long history of advising and supporting these companies as they pursue their growth plans and ultimately their dreams. It may also be fair to say that $1 of every $2 in our local economy originates somehow from family-run business efforts, so as our family-run businesses go, so we go as a community.
How does Bank of America serve family businesses here?
We have a dedicated team of small business and commercial bankers here in the Central Valley that works directly with local family businesses. Our advisement ranges from short- and long-term planning to developing the next generation of leadership and the transfer of assets. A common and daunting consideration for family-led companies is always considering whether to keep the business in the family, sell the company entirely or eventually go public with it. For example, the entire process of finding a fair value for your company at which to sell is very specialized and one that we help with — as well as what to do with the capital event once the sale is complete.
What are some of the difficulties family businesses have in accessing capital?
Understanding what is required to obtain a loan, what options are out there for them and also where to go to learn and get help as it’s more than just capital that family firms often need. Unfortunately, many smaller and newer family-run business owners have challenges finding a trusted group of advisors, which is so important — a team who will be there to help them as they work through common growing pains and scale. This is why our Bank of America team partners with local Chambers, city governments, Community Development Corporations, CPAs and tax experts who together support family firms in every stage of their existence — from start-up to exit strategy execution.
But, also, on the capital side, the exciting news is that the region’s businesses have been growing since the pandemic and our demand for capital for our business clients reflects this. So far this year, Bank of America has already extended nearly $500 million in credit to small, mid- and large-size local companies, many of which are family-run businesses operating here in our community. That amount is more than we’ve lent in entire past years. But we want to be sure that we are also lending responsibly in that our business clients are strong enough to be able to take on the additional debt. That is why close advisement and having trusted relationships with a local banker are so important for a family business.
What are some of your favorite local family businesses?
Ampersand Ice Cream
Willow Gardens Nursery
Saints Motor Sports
Just to name a few…
What advice do you have for family businesses just starting out, and those that are firmly established?
Stay close to your business, but look for people you can trust for advice and support. Plan for the unexpected because it will happen eventually. Take risks, but always leave enough in reserve to get through a challenging time. Growth is important, but be careful not to grow so fast that it can lead to failure.
What’s keeping small biz owners up at night?
We are in the midst of the greatest wealth transfer in history due to aging demographics and changing priorities. This includes record levels of business transfers as owners approach retirement age as well as the pandemic having prompted many owners to reconsider their priorities related to their business, family, legacy and really their purpose. In my role, my team and I are helping more and more family business owners determine what direction they should go in.