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ON THE MOVE SEH NAMES STEVE WINTERS TO LEAD WEST REGION OPERATIONS Short Elliott Hendrickson Inc. announced that Steve Winters, PE, has been named Vice President, West Regional Leader. In this role, Winters will spearhead the company’s strategic growth across the western U.S., serving clients in Arizona, Colorado, New Mexico, and Wyoming. With more than two decades of experience, Winters has led multiple high-revenue private sector projects as regional practice center leader, while also contributing to company-
wide governance as chair of the Board of Directors Nominating Committee. He played a pivotal role in the Russell Planning & Engineering merger with SEH in 2019, showcasing his ability to unite teams and deliver on strategic goals. “Steve’s insight and leadership have been instrumental in building long- term partnerships and achieving client success. His strategic mindset and ability to foster connections will be invaluable as we continue to grow. I look forward to the impact he will make in this new role,” said David Ott, PE, CEO and president.
Winters holds a bachelor’s degree in civil engineering with a minor in economics from Iowa State University-Ames and is a licensed professional engineer in Colorado and Arizona. “I’m honored to take on this role and excited about the opportunities ahead,” Winters said. “SEH has always focused on building meaningful connections – both within our teams and with our clients. I look forward to continuing that work and leading our efforts to grow and innovate.”
have lending limits that could impact you. There’s a limit on the total amount of debt they can have from any one firm or individual, and you need to know what those limits are. They also have limits on what percentage of their total lending falls into particular buckets such as construction loans or investment properties that could impact you. 5. For those of you who rely on a line of credit secured by accounts receiveable, you need to understand what a borrowing base is and know what your loan covenants are. Borrowing base is typically the total of all of your accounts receivable under 60 or 90 days, with, in some cases, deductions for what the banks consider “installment billings” based on percentage of completion. The bank will then typically allow you to borrow up to 75 percent of that total borrowing base on your line of credit. And by the way, that could be less than the total amount of your line of credit. That max is based only on your borrowing base. A lot of folks don’t understand that. And there are also typically covenants for things such as debt coverage ratio or debt-to-equity ratio, and some even include what is called a “cleanup clause” that mandates you have to be completely out of the line of credit for 30 days a year. Know your covenants and abide by them or your bank could be forced to cut you off. 6. If you are a major owner in your firm, be ready to sign personal guarantees for your company’s debt. A lot of this depends on how long you have been in business and had credit, and how much of the firm you own. But understand that personal guarantees are very common. Your spouse needs to understand what you are committing to, also, with these guarantees. 7. Banks like to be kept informed. I like to give them continuous reports on how the business is doing, good or bad. They don’t like surprise bad news and do like having time so they are equipped to help you. Banks want to help you if they can. It’s how they make money. I could go on here but am out of space. This is an important topic, however, and if you aren’t schooled on it you had best do what it takes to get up to speed! Mark Zweig is Zweig Group’s chairman and founder. Contact him at mzweig@zweiggroup.com.
MARK ZWEIG, from page 5
in what they pay for the money they lend to customers and what they lend it out for is typically around 3 percent. This is called “net interest margin.” They have to pay all of their people and all of their overhead and insurance and everything else out of that 3 percent. The truth is they have such a thin margin they cannot afford to have any debts to them go unpaid. So that means they have to be extremely careful in everything they do. 2. Work with local or regional banks where you can get to know the decision-makers and have a personal relationship with them. I learned this very early on. My first company bank was Bank of New England. When they failed in January of 1991, we had a very small line of credit. Even though they eventually honored their credit relationship with us (after an initial scare when the feds took them over), I learned then that I wanted to have a banking relationship with a smaller bank where I knew the top people. We moved everything to a local mutual savings bank where I had a home mortgage, home improvement loans, and more, and where the bank chairman drove past my house every day on his way to work. I was known to them and we had a very good mutual relationship with them from that point on to when we sold our business to private equity in 2004. I have had a similar relationship with my bankers here over the past 20 years, and the top people in them are personal friends who have always supported me when I needed it. 3. Have more than one banking relationship. Banks can sell, and the top people can retire or leave the bank for any number of reasons, so to protect your ability to get credit, it’s probably a good idea to have more than one bank that you do business with and that has people who know you. Most good bankers who care about you and want to help you actually appreciate it when you have another source of debt capital if you need it. The responsibility for keeping you in business doesn’t all fall on them. It doesn’t mean that you don’t have a primary bank where you always go to give them the first shot at your business, either. 4. Commercial banking is a heavily regulated industry and there are limits as to what they can do for you. Banks
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THE ZWEIG LETTER DECEMBER 9, 2024, ISSUE 1564
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