In a financial slump? The sooner you talk with your bank, the better.
Financial advisors across the province are working to get the message out to homeowners and businesses that the sooner people reach out to their bank, the faster advisers will be able to find a solution.
Lisa Colangelo, TD Bank’s vice-president of the Edmonton region, says the bank has a program called TD Helps, which works with homeowners on upcoming challenges. If the bills start to mount and there is the potential for missed payments, Colangelo says that is the best time to talk to the bank.
Analysts will look at each individual circumstance when helping figure out a solution. Colangelo said there may be options to create flexible mortgage payments, defer the payments or consolidate loans if necessary. There are many ways to find a solution, she said.
“We want to speak to all Albertans about how to help them,” said Colangelo.
Situation not as bad as it seems
While there is an economic slowdown the trick is not to get caught up in the hype.
Rob Bennett, ATB Financial’s executive vice-president, suggests that the economy has slowed down but the layout of the land is not as bad as it appears.
As a Crown corporation, ATB continues to lend to businesses and individuals in the province, said Bennett. He used recent personal bankruptcy numbers to illustrate his point.
In January 2016 there were 390 personal bankruptcies compared to 278 in January 2015. While there is a bigger difference, Bennett takes a global perspective when considering the data.
The January 2015 bankruptcy data is also the lowest number of personal bankruptcies since 1992. The 2016 numbers are the third lowest on record since 1992, January 2014 is the second lowest since 1992 at 236.
And in January 1994, there were 395 bankruptcies in the province. Since that time the Alberta population has increased but the net number of mortgages has stayed relatively the same.
“There’s no question that the economy is going through an adjustment. People are going through an adjustment,” said Bennett.
He suggests the issues Albertans are facing now is an issue of cash flow. “Shoring up capital, shoring up cash flow before more headwinds hit is really, really critical.”
Getting through the tough times, however, necessitates a conversation with homeowners’ banks to put them in a position of strength. Bennett said financial advisors will help a person create a plan of action one case at a time.
Bennett took data on bankruptcies from the Office of the Superintendent of Bankruptcy.
Evaluating a business model
In any economic climate, but now more than ever, companies should evaluate their business viability.
Janeen Lemay, branch manager of Ponoka Servus Credit Union, suggests companies have to look at their assets, available equipment and employee skill sets.
While these questions are important, Lemay reiterates the importance of communicating with the bank. “We need to get them qualified while there is still quality,” said Lemay.
Planning with a lender or bank will help a company find where they can reduce costs but keep afloat. She suggests, with preparation, there may be ways companies can take advantage of provincial grants and projects coming down the line.
A mistake she sees some small business owners make is blurring the lines of personal and professional assets. Lemay advises small business owners pay themselves first and take care of their family and home. Leveraging personal property can be a risk if the company were to go into receivership.
In an effort to work with central Alberta companies and create some networking opportunities, Lemay is organizing a workshop for some time in June. The focus of the workshop is two parts: looking at the state of the economy and finding ways to adjust and how to create a business and make it viable.
More information on the workshop will come when dates and speakers are solidified.