Tax-reform legislation passed by Congress in the Tax Cuts and Jobs Act at the end of last year changes the game for many in regard to their personal and business financial planning. The fact that things are different now and include new opportunities and challenges is clear; what may not be clear to banking clients is exactly what this new framework means for their individual situation.
This can be complicated, confusing stuff, which the folks at Webster Bank understand; they have watched the situation carefully.
Knowing that its valued clients would have individual questions and be looking for the best solutions, Webster Bank has made strides to assure it can direct them to the most expert advice possible.
“It’s important to note,” said Tim Bergstrom, regional president and head of business banking for Webster Bank, Connecticut, “we are not in the business of offering tax advice. We are in the business of working alongside tax professionals and tax attorneys for our clients’ best interests. We are certainly here to maximize clients’ cash flow that they may realize as a result of their tax rate being slashed.”
And improving cash flow, said Bergstrom, is a constant main business focus among the bank’s business clients.
Ripple Effects
John Guy Jr. is Webster Bank’s director of business banking and is based out of the bank’s Southington office. He said that business owners are interested in learning about the tax-rate change and how it relates to making informed financial decisions, understanding any new challenges and the best ways to put freed-up dollars to work, which now may be available to support new growth.
“Tax reform can affect payroll, practices, assets, investments and efficiencies. We can bring in an expert to help create that framework on changes to the tax law and show them how it may impact their day to day,” Guy said.
“With the basic corporate tax rate going from 35 percent to 21 percent, more income may be available. They may have more cash and less to borrow. Our business clients need to know what is deductible and how much is deductible, with their business and individually,” he said. “Paying less to Uncle Sam may mean additional money to purchase assets and fund growth.”
First Things First
A logical first step for businesses looking to get an idea of how tax reform will impact their companies is an appointment with their accountant, Bergstrom said. For clients who don’t have an accountant, the bank has accountants it regularly partners with and is happy to make those introductions.
Bergstrom recommends owners start there, a good beginning in tax-reform considerations that will provide focus and clarity.
A company’s business structure — whether it is an LLC, C-corporation or S-corporation, for example — is a main factor in reviewing how tax reform may impact that particular organization and its future.
“They seek a clear understanding based on corporate structure as they plan out their year relative to compensation, capital spending, expansion and additional hiring,” Bergstrom said of business owners, knowledge and advice that is all in a professional accountant’s wheelhouse.
As for Webster Bank, its team looks to not lead a discussion of tax-reform and its effects on its client businesses, but rather, to be a part of the
expert team behind each client to ensure they get information they need to make decisions.
The bank sees its role as knowing and meeting the needs of its clients, especially where it pays to be proactive. It just makes good business sense.
“We look to add value where we can, to be part of a relationship. Our reputation is not built on us selling something. It is part of our community calling — to be there for clients and help them understand the environment they find themselves operating in,” said Guy.
And connecting business owners with financial experts is part of a larger bank commitment that goes beyond just the issue of tax reform.
By way of example, the bank regularly reaches out to companies on other matters involving financial planning and protection, hosting professional sessions to help businesses avoid potential pitfalls with issues like cyber-fraud and data breaches. “We do this all the time,” Guy said. Informational sessions were held recently on tax reform in the bank’s Hartford and Danbury locations.
“It’s the Webster way, taking responsibility for meeting customers’ needs,” said Bergstrom.
Specialized Service
Webster Bank has about 40-thousand customers across four states. But it succeeds at providing individual, customized, business financial services with bankers who have areas of specialty by industry.
Whether a business client has questions on tax reform or small-business lending opportunities, whether they are nonprofits, healthcare organizations, distributors, wholesalers, professional services providers, manufacturers or property management firms, Webster Bank has specific experts available just for them.
Guy said that Webster Bank helps its customers navigate what tax reform and small-business lending changes mean for their business and for their personal finances, relying on experts at the bank, or experts that are part of its outside network.
“We love to hear from customers and how we have helped them fulfill their needs and dreams,” Guy said. “It’s rewarding to step back and see how far they’ve come when we have been a part of the story of their business lifecycle.”
