Back in March, when Santa Clara, California-based Silicon Valley Bank collapsed, it was a mad dash for some businesses to get their money out, and fast. Finance chiefs especially were rattled and scrambling to assess their exposure to the banking turmoil. 

Now, a few months later, businesses need to be especially strategic when it comes to managing their business funds, according to current CFO of German-based Pricefx — a pricing management software company — Gillian Sheeran, as an unpredictable business environment can make things more complicated when you as an organization are forced to scramble around funds.

Sheeran has been with Pricefx since July of 2022. Prior to Pricefx, which provides software that allows pricing managers to analyze and set their strategies, she held various financial leadership position at mostly tech companies, and held another CFO role at a consulting business known as VantagePoint from July 2018 until July 2019, according to her LinkedIn profile.

“Supplier diversity with your financing suppliers is definitely a good thing to have,” she said in an interview with CFO Dive. In this case, those financing suppliers are the banks you choose to manage funds with. And there are many ways to do that, depending on what kind of business you are, she said. 

Supplier diversity

Add together extremely high interest rates, inflation, and other headwinds in the macroeconomic environment with the recent failures of institutions like Silicon Valley Bank, and finance chiefs are under immense pressure to protect their organizations against future such events, CFO Dive previously reported. 

“If you're banking with a smaller organization, you should really look at their capital structure, and you should really look at where they make their money. Then you'll know whether your bank can survive this,” Sheeran said. 

Additionally, financing with more than one bank is a good way to avoid risks, she said. “A big global bank like J.P. Morgan Chase for example, can give you the security of the government as well, since they will likely stand behind them if something were to happen,” she said.

Besides or in addition to supplier diversity, Sheeran believes that staying ahead of your refinancing is key. For smaller businesses and startups especially, staying on top of this is essential to avoiding risk, the finance chief said.

“You should always be ahead of your refinancing because the worst possible time to refinance is 20 minutes before you need the money. Yes, you might get it if you're a great business, but you will sign up to terms that are incredibly restrictive,” said Sheeran.