RESILIENCE: Succeeding in a Post-COVID Economy

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RESILIENCE: Succeeding in a Post-COVID Economy

Inside: 2

The Financial Impact of a Pandemic


Checklist for Rebounding in a Post-COVID World



John and Mary Kendzierski, Innkeepers at the Inn at Ellis River

The B-47 Stratojet arrived in 1956 at what is now Pease Air National Guard Base.* Service CU was formed to serve airmen and their families in 1957. *The Portsmouth Herald Portsmouth, New Hampshire April 20, 1956

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Bob Coco, Owner of Newfound RV Park and Campground



Lori Cote, Small Business Lending Team Leader at Service Credit Union


Financial Literacy and Online Tools

Dear NH Business Owner,


elcome to the first edition of the NH Business Finance Guide. On behalf of myself and the rest of the team at Service Credit Union, we are excited and honored to be able to provide you with valuable information about entrepreneurship in our home state of New Hampshire. In 1957, Service CU was formed to provide affordable credit to airmen and their families at what is now Pease Air National Guard Base. Today, we still serve active and retired military and their families, as well as consumers worldwide, including businesses of all sizes throughout New England and beyond. Service CU is committed to helping improve the lives of those we serve. For business owners, this means we are dedicated to helping you reach your goals by offering personalized, customized solutions. When you work with us, you are trusting us with what’s most important to you, and we take that very seriously. We’re here for you because we share your dreams, as well as a mutual respect and a desire to ensure you reach all your business goals. Businesses have learned how to be more effective during the pandemic and are more resilient as a result. New Hampshire, and our nation at large, is ready to face what comes next after the incredible impacts the pandemic has had on every part of our world. Service CU has proudly been there to serve New Hampshire businesses by providing over 600 Paycheck Protection Loans, representing over $23 million dollars. Now that we are looking forward to the future, I am excited to tell you that our local economies are fostering new growth, new jobs, and business expansion leading to renewed promise and excitement for each business, community and family. Tomorrow may look different for your business, but together, we can start taking steps to come back stronger than ever. In this issue, we will discuss what that new landscape looks like for New Hampshire business owners. I think you’ll find the information not only timely but also very useful. I encourage you to reach out to us at any time to share your business hopes and dreams, and my team of experts can help you reach them. Your partner in success,




merica’s Economy Begins to Shut Down” — that was the front-page headline in The New York Times on March 16, 2020. It was the beginning of widespread economic shock and massive dislocation for businesses of all kinds. It would last far longer than anyone could have imagined.

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In New Hampshire, Gov. Chris Sununu had declared a state of emergency that shut down all nonessential businesses and required people to stay at home. As the state went dark, businesspeople began to grapple with a new — and unsettling — reality. “It created a constant state of change where businesses had to pivot very quickly from what they knew as business as usual, understand what was occurring in their new world, and figure out how to adapt,” says David Weed, Assistant Vice President of Business Services for Service Credit Union. He adds that all aspects of business — operational, logistical, governmental, human resources — presented “impacting, unfolding” challenges. No business was untouched by the rising cases of COVID, but some were affected more dramatically. The state’s hospitality industry was particularly hard hit. “If you were running a hotel or a restaurant, you went from 100 mph to zero overnight,” says Earle Rosse, Senior Manager for Commercial Lending Business Services at Service CU. The same was true for inns, B&Bs, convention centers, conference centers and retail stores. Seasonal businesses fared the worst. With no customers, the cash flow stopped in a hurry. What didn’t stop — the bills for overhead. “If you were heavily leveraged, without much cash in reserve, you had a big mountain to climb,” Rosse says. That reality wasn’t confined to the hospitality industry; it quickly spread across all sectors of the state’s economy. FINANCIAL RELIEF Service CU, the largest credit union in New Hampshire, stepped in to help provide relief. It facilitated the federal Paycheck Protection Program (PPP), which gave customers access to capital they needed to survive. David Weed led the process to develop procedures that enabled the Service CU team to quickly process hundreds of PPP loans throughout the region. He was recognized for his efforts with a NH Business Review 2020 Business Excellence Award. (See sidebar on page 4.) There were other programs that also cushioned the blow, including the state’s Main Street Relief Fund and Small Business Administration loans. Though those programs are now winding down, Weed says, “Those sources enabled a number of businesses to operate through a very stressful situation.” Another way Service CU helped businesses was through payment deferrals. If businesses could demonstrate an impact from COVID, such as having to shut down

because of government restrictions, Service CU could defer payments on loans for up to six months. Requests for deferrals are now back to normal levels, but Weed says, “Even this year, there are some. We try to support the businesses whenever we can.” On an ongoing basis, there is a complete range of depository services, like cash management, which has continued throughout the pandemic. Even though many banks stopped commercial lending early in the pandemic, Service CU did not. Rosse says, “Those were our members who needed to stay open and needed financing to do it. We tried to make sure they were able to.”

Those were our members who needed to stay open and needed financing to do it. We tried to make sure they were able to.


YET MORE CHALLENGES Lack of cash wasn’t — and isn’t — the only challenge that COVID has created for businesses. Hiring and keeping employees is another. “Businesses have always worried about finding good people who will come and stay for a while, but that worry has just grown tremendously,” Rosse says. Even with all-time-high wages, incentives and bonuses, “there’s nobody around to take the job,” he says. And, if businesses are able to hire someone, they often don’t show up, or leave after a few days. Why? Rosse says no one seems to know why, but one thing is for sure: “No company I know feels totally confident about their ability to attract and keep good, talented people.” An aging population in New Hampshire further dilutes the pool of possible hires. In light of diminishing options for staffing, David Weed says each business has to do a risk analysis. “They have to ask, ‘With this new reality, can I physically operate in the same manner I did before?’” For many businesses, the answer is “no.” And that means limiting services, limiting hours, keeping employees safe, and working with them if they have constraints. | March 2022 3

They have to ask, ‘With this new reality, can I physically operate in the same manner I did before?’


To pay the higher wages required in a reduced labor market, businesses have had to raise prices. “If you have a restaurant that had an average cost of employees at, say, $14 an hour, and all of a sudden that number goes to $18 an hour, the only alternative they have is to raise the price of the bacon and eggs they’re selling,” Rosse says. That upward pressure on prices helps to fuel inflation, which has hit highs not seen since the 1980s. That means higher prices for goods and services of all kinds. And, adding to the challenges, there are serious supply chain issues, making it difficult to purchase needed products. “In general, two to three months isn't atypical for delays, sometimes it’s up to a year,” Weed says. “It’s continuing to impact businesses across the board with no real end in sight.”

THE ‘NEW NORMAL’ Ask Weed what business life will look like once the pandemic recedes, what people are calling the “new normal,” and he says it’s anyone’s guess: “We don’t know what we don’t know.” But taking the right steps now can make a big difference in how well businesses weather any uncertainty. In general, he says businesses are going to need to keep their financial house in order, so that they can pivot to adjust to the changing environment. That includes having six months of capital reserves. Working remotely is likely to continue to some degree, he says, and that will mean the rebalancing of office space in some communities. Rosse, who handles commercial real estate lending, agrees. “Do we need a huge office building where 500

people show up to work every day?” he asks. “I think it’s going to be a long time before the working environment looks like it did prior to the pandemic, where everyone got up in the morning and went someplace to work.” Remote work has intensified a challenge for businesses that existed pre-pandemic: cybersecurity. Migration to a digital platform creates many more issues about keeping proprietary information safe, keeping customer information safe, and reducing the threat of fraud. Rosse says those challenges do have a plus side: It’s “accelerated the pace of the required technology by eight or nine years.” Take Service Credit Union’s switch to a remote workplace for many back office employees, for instance. Weed says the transition took just three days. He says it’s “thanks to the company’s IT infrastructure and a very robust online banking platform that allowed us to move to remote quickly, all the while maintaining security and compliance.” Rosse adds, “Our IT team worked relentlessly through the pandemic. That we’ve been able to do this — while safely maintaining an extraordinary level of in-branch office work to serve our members — was miraculous.”

Leadership Recognized When the pandemic hit, the federal government moved quickly to provide financial aid with programs like PPP (Paycheck Protection Program). With so many businesses affected, financial institutions were flooded with applicants. At Service Credit Union, David Weed, Assistant Vice President of Business Services, led the effort to process hundreds of PPP 4 | March 2022

loans quickly and efficiently, helping to keep many New Hampshire businesses afloat. For that effort, Weed received a NH Business Review 2020 Business Excellence Award in Financial Services. The NHBR awards recognize “the imagination, industriousness, innovation and achievements of business owners and operators in New Hampshire.” Weed credits all Service CU

employees involved in facilitating the PPP loans, saying it was “a team effort.” And he adds, “We are grateful to New Hampshire businesses for trusting in us and are here for them no matter what."

SUCCESS DESPITE THE UPHEAVAL As daunting as it seemed for businesses in the early days of the pandemic, many ended 2021 in the black — and then some. Weed says Service CU, despite everything, had record volume and growth this past year. Many others — such as Bob Coco, owner of Newfound RV Park and Campground (see story on page 8), and John and Mary Kendzierski, owners of the Inn at Ellis River (see story on page 6) — have also successfully navigated the pandemic. That’s not to say there aren’t still dangers ahead. As the explosion of the Omicron variant has demonstrated, this isn’t likely to go away anytime soon. “Unfortunately,” Weed says, “we’re going to have to become accustomed to living with the virus.” Businesses have been through tough periods before — oil embargoes, recessions, a neardepression and soaring interest rates, among them. But, Rosse says, “The unsettling part of this is you have no idea how bad it will get and how long it will last. It’s never knowing what you’re going to find tomorrow when you open the front door. … The pandemic and the effect on businesses is a watershed event, a turning point, and it’s going to cause some shakeout in the general business community.” But the threat can be mitigated, Weed says, with the help of trusted partners who understand and can help. “Bring in those trusted partners and have that conversation to adapt, succeed and continue to grow.” n

Your Checklist for Rebounding in a Post-COVID World 

Budget Discipline

£ Do you have a monthly budget plan that you stick to?

£ Do you review and modify your budget plan, understanding budgets are living things that need to adapt to your circumstances?

£ Do you utilize an accountant or an accounting software package where you can leverage a cash flow model?

Keep Plenty of Reserves

£ Do you have 6 months or more of reserves to support normal business operations in case of emergency?

£ Have you worked with a lender to select the best account type for your particular reserve needs?

£ Aside from your reserves for emergency times, do you have savings to be able to expand, buy new equipment or move into different real estate?

Embrace the Digital World

£ Can your customers find you online? £ Do you have a user-friendly and engaging website? £ Do you have social media pages on more than one platform?

£ If appropriate for your business, can your customers reach you digitally by email or website messaging?

£ If you are an appointment- or reservation-based business, can your customers book or reserve time online?

£ Do you reach out digitally to your customers? E-newsletters? Email loyalty promotions or coupons?

£ If you have merchandise to sell, is your merchandise available to order or shop for online? | March 2022 5



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he sign says it all. They weren’t born in Jackson, NH, but they did get there as fast as they could. And, since their move to the scenic North Country town seven years ago, they’ve very much enjoyed their new life as Jackson residents and as proprietors of the Inn at Ellis River. The photo of John and Mary Kendzierski was taken as they were celebrating the signing of the papers to buy the inn in 2014. It was the culmination of a dream they’d had for years, one inspired by their frequent visits to inns in the Jackson area, including the inn they bought. “Every time we left,” John says, “we always said, ‘Wouldn’t it be neat to be an innkeeper?’” A major factor in their decision to finally realize their dream was the stress of their work life in Massachusetts. Living in Plymouth at the time, they both worked for the same company but at different locations. Mary had a four-hour commute. “That is four hours of precious time,” she says. “I know a lot of people do that, but I just didn’t want to do it anymore.” Making the situation worse, the couple worked different shifts to accommodate the care of their daughter Stephanie, then a toddler. Mary worked the day shift, John, the night shift. “I was getting home at 5:30 in the morning,” John says. “I walked in the door as she was walking out.” The commute, the shift work, and the lack of time together was stressful. “I felt like I was 95 years old every day,” Mary says. “We both decided that was it. We needed more quality of life.” Now Mary’s commute is about 50 feet, just a quick walk across the inn’s parking lot, with a river view as an added bonus. The couple is now together most of the time, and there’s lots of opportunity for time with their daughter, who’s now 14. The turning point had come in the spring of 2014, when John attended a seminar on inn ownership. As part of the seminar, he was asked to create a model for ownership of an existing

inn. Having been a guest at the Inn at Ellis River, he used it for the model. After the seminar leaders pondered the model, he was told that it would work and, coincidentally, the inn was about to come onto the market. Six months later, the Kendzierskis signed the papers for the 20-room inn. The inn’s beautiful setting alongside a river, the history of the circa-1890 structure, and the inviting accommodations make the inn an appealing choice, especially during foliage season.

“September and October of this past year were the best we’ve ever had,” Mary says. “And we were booked solid for the Christmas vacation week.” And that was without the usual visitors from Europe, who were absent because of COVID. What more than made up for that is people who lived closer by and didn’t want to travel, also because of COVID. “Instead of doing their dream trips that they had to cancel, people would head to New Hampshire where they can go hiking, where you can be outdoors.” Though 2021 was a good year for the inn, 2020 was not. “That year, we were closed for 3½ months,” John says. “From mid-March to the beginning of July.” They had to lay off staff, which consisted of two housekeepers and an assistant innkeeper. There was little money coming in. Fortunately, most of their regular guests didn’t cancel their reservations, didn’t ask to get their deposits back — they just moved their visits to a later date. One person sent them money for “a future date.” John says, “We had the minimum we needed in our bank account to get through June.”

The real lifesaver was a three-month deferral of mortgage payments by Service CU, a deferral that the Kendzierskis didn’t even have to ask for. Lori Cote, a

Service CU Business Development Officer in the Gorham branch, simply called just as the pandemic hit to tell them the payments had been deferred. They also got funds from the federal Paycheck Protection Program through Service CU as well as funds from the state’s Main Street Relief Fund. “That took a huge pressure off of us,” says John. “We never hit negative in our bank account.” Another reason why the account never hit negative — the couple was saving $1,800 a month after moving their mortgage loan to Service CU just before the pandemic hit. By August of 2020, the staff was back and the guests returning, beginning the upswing that built a successful 2021. The biggest COVID-related challenge now, says John, is getting needed services like a land survey (“the surveyor is booked and not taking new business”) and needed products (“we ordered two new beds six months ago, and they still haven’t come”).

They worry, too, about whether they’ll be able to replace employees if they leave, especially the housekeepers. “Housekeeping is not a fun job,” Mary says. “We’re lucky to have the people we have. We do have fun here, but we know if we lose anyone it’s going to be hard to find a replacement.” Their plans for the future? Because they’re not able to expand the number of rooms the inn has, John and Mary are looking for other ways to increase revenue — for starters, combining two bedrooms into a suite and creating a tearoom, which Mary is certain will draw people in. In the meantime, they’re looking forward to another busy season, with skiers starting to arrive. While being busy is good, Mary and John are planning to take time off in the months ahead. “COVID has changed how we want to live,” John says. “This year, we’ve scheduled more time off than we ever have. It’s important. It makes us better at what we do.” n | March 2022 7



Bob and Anita Coco enjoy their new life at Newfound RV Park and Campground.

In the midst of every crisis lies great opportunity. — ALBERT EINSTEIN


n the winter of 2020, Bob Coco was having his best business year ever. Then came March.

When COVID struck, his successful skate-sharpening business came to an abrupt halt. “We went from six days a week at full speed to nothing, zero,” he says. “That was a shock.” Both his retail store and his international online business had to be shut down. It was a business that Coco started when he retired from his service as an officer in the Navy in 2003. He knew he wanted to work for himself, so he took the skills he had learned sharpening skates for himself and his ice-hockey-playing friends and made a business out of it. He opened No-Icing Sports Hockey Pro Shop in a 600-square-foot store in Hudson. “Well, it just took off,” he says. “I had this little niche. Nobody did what I did, and nobody did it as well as I did.” Within a year, he moved to a bigger store. Two years after that, he moved to a bigger store. Along the way, he went online with Skate Rescue Service, sharpening skates for people as far away as Australia. Life was good, until it wasn’t. “After COVID, we maybe had one customer a day in June, July and August of 2020, if we were lucky,” Coco says. “You can’t keep a retail store open under those conditions.” With sports shut down across the country and no certainty about when the industry would come back, even his online business had to be shut down. With his businesses suddenly shuttered, stuck at home with nothing to do ­— it was a terrible time for both him and his wife, Anita. “We weren’t making enough to pay the bills,” he says. He turned to Philip Rentz, a Business Development Officer at Service Credit Union, who facilitated a loan from the federal Paycheck Protection Program that he used for rent and utilities. His landlord also gave him a break. “That helped get us through,” he says. By then, Gov. Chris Sununu had opened the state’s campgrounds, one of the few businesses that could safely operate at the time. After months of being at home, Coco and his wife decided to take their camper and head to a campground that was a short walk from

Service Credit Union and the Military

Newfound Lake in Bridgewater. “We were sitting around the fire, saying how much we liked the place, how well laid out it was,” Coco says. “Then my wife said, ‘It’s for sale.’” Coco dismissed the thought, thinking they couldn’t afford to buy it, but when they got home, he checked out the selling price. It was low enough he figured it was doable. With financial advice and a business mortgage from Service CU, they bought the campground

We were sitting around the fire, saying how much we liked the place. Then my wife said, ‘It’s for sale.’ — BOB COCO

in September 2020. After using Service CU for the PPP loan, Coco says it was the first place they thought of for the campground mortgage. As he was once in uniform, he got the special programs that Service Credit Union offers the military and veterans. (See sidebar.) Now, a year later, they’ve doubled the previous owner’s best year. “I think it’s the best year the campground has ever had. Every weekend, other than maybe two or three out of the whole season, we were 100% occupied, every weekend,” he says. “Even weekdays, there were more people camping.” Before COVID, the occupancy rate ranged between 50% and 60%. Why was business so good in the midst of COVID? Coco says, “People who would normally fly somewhere, go on a cruise or stay in a hotel weren’t doing that, but they wanted to do something.” A whole lot of people bought or rented campers. Manufacturers shipped more than 500,000 of them in 2021, according to industry statistics. That created a huge demand for campgrounds. High demand and low overhead make for a successful business. Coco and his wife operate the campground with no employees. He says it’s easy to run, with little maintenance needed other than mowing the grass and hauling firewood. That leaves him time to run his other business: the online skate sharpening. He had transported the sharpening

When it was founded in 1957, Service Credit Union’s sole mission was to provide affordable credit to airmen and their families at what was then the Pease Air Force Base in Portsmouth. Five decades later, its mission has expanded to those outside the military, but it is still providing special services for active duty military, veterans and their families with loan discounts, special savings programs and more. Its work with the military has garnered numerous awards. Among the most recent: • Newsweek magazine selected Service CU as having the “Best Military Savings Account” in its 2022 list of America’s Best Banks. • In December 2021, Service CU was one of four credit unions selected by Personal Finance Insider for its list of “Best Banks and Credit Unions for Military Members and Their Families.” • Investopedia selected Service CU as one of the “Best Credit Unions for 2021” for its services to the military and their families. FEDERALLY INSURED BY NCUA

equipment from his store to the campground, and so was ready when sports began opening up again. He does the sharpening in the morning and then tends to his campground duties the rest of the day. To date, he has about 12,000 online customers. While the skate-sharpening business is likely to continue to flourish once COVID recedes, Coco knows the campground business might not. “We’re going to lose some,” he says, “but maybe quite a few will have gotten the bug and stay with it.” Regardless, he’s happy he’s no longer in the retail business, happy to spend his days outdoors, happy to be near ATV trails and the lake, and have the time to enjoy them. As he says, “So far, so good.” n | March 2022 9



hen Lori Cote joined Service Credit Union three years ago, she brought with her a passion for “helping the little guy.” And so she has, first as Business Development Officer/ Commercial Lender and more recently as Small Business Lending Team Leader at the Gorham branch in New Hampshire’s North Country. Her background as a small business lender for a bank, combined with her time at Service CU, makes her a valuable partner for small and medium businesses. We talked to Lori to get some insight into her experiences, both personal and professional. Why do you love this line of work? It is the perfect balance of being able to help people, being challenged every day, and being in an environment where

you can grow and learn. I feel like there is no ceiling on what I can do every day. It is an amazing feeling to know that you can learn something if you're open to it,

Lori Cote with fellow golfers at the annual Androscoggin Valley Hospital Golf Tournament, which Service CU has supported for many years.

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that you're going to learn something new today, and there's probably going to be somebody new that you can help today. Every day, my love for this work grows.

or upgrading equipment? How would I secure the transaction? What collateral would I need? If business owners think through those questions, we’re in a better position to help them.

Can you describe the corporate culture at Service CU?

What do you see as the most common mistake small business owners make in their financials?

I feel our culture encourages everyone to have open communication. You can talk about the challenges you're facing, but when you have those conversations, they immediately turn to how can we resolve this, how can we improve on what we already are doing. I feel my voice is heard, that I can bring something to the table and it's going to be considered. How does that culture translate to our members? They feel it because we're able to tell them we don't operate a cookiecutter business here, that we have the flexibility to be creative. We don't have these hard and fast lines that we adhere to; we’re open to saying, “OK, we don't have any loans like this in the books, why don't we? Is this something we should entertain?” We can have those conversations, and it opens us up with our members to be able to say, “I'm not sure if we can get this done, but we're going to try.” We also make sure that we keep lines of communication open with our other partners, and other financial institutions, so if there's something that for some reason we can't do here, we can refer that borrower somewhere else. We're not about just putting loans on the books. We’re about helping our members, and that's a huge thing that sets us apart. What are some questions people should ask themselves before meeting with a lender? What do I need now? What do I need tomorrow? Next year? If it’s a seasonal business, what is my plan for getting through the winter? Do I want to grow my business, or am I looking to sell? What’s the plan for replacing

Not being familiar with and not understanding the numbers. A small business owner can tell anyone all day long that they pull in $100,000 from their business every year, that's their salary. But it doesn't mean anything if the financials don't support it. What is one thing you want small business owners to know? That we are here for you. And that doesn't always mean what you want it to mean; it can mean we're here for you by declining a loan if you can't afford the payment. We're here for you to offer you commercial financing that's going to help you grow your business. We’re here for you by saying this is a startup business, let's work on your business plan. Here’s the contact information for your local SCORE chapter (a nonprofit network of volunteer business mentors), let's connect you with someone there. But I think overall the message I want to be loud and clear is that we are here for you. Why is it important for a member to have a relationship with a lender they trust?

The best way to explain why it’s important is by what I saw at an SBA annual meeting when a business was receiving an award. The business owner said, “I can't be up here without my lender, my partner. I couldn't have done this without you.” They went into the audience and pulled the lender up on the stage. This was not just somebody they got a loan from; this was a partner who helped them through the process.

What is the proudest moment of your career so far? The day I received my National Association of Government Guaranteed Lenders (NAGGL) SBA lender diploma. I'm one of 263 people in the United States who has this diploma. That allowed me to be an authorized official for PPP (Paycheck Protection Program). We’ve worked with over 600 small businesses and provided just over $23 million in paycheck protection, so that's a pretty proud moment, too. What challenges has the COVID pandemic presented? I have made it my own personal challenge to try to make everyone feel that I'm there for them, that I'm right beside them through this process. There are very few branches in my territory, so oftentimes we would meet at coffee shops. We'd be in close proximity, sharing a cup of coffee. We’re not doing that now, but I’m still trying to give everybody that coffee shop experience but in a protected environment. That’s been my personal challenge through this, and I’m still working on it. Now almost all real estate closings are handled by email with DocuSign, so we’re challenged every day to deliver that high level of experience and to create a connection with people that we're likely not going to meet face to face. How do you create that connection? The biggest thing with small business owners is they want clear communication, so now I'm learning how to best communicate with people. Do they want to text? Do they want to email? Do they want a phone call? Do they want to try to meet? I work with them on whatever communication level is best. This is what we do here at Service CU —­we accommodate, that is exactly what we do. It’s about what meets your needs the best. n | March 2022 11

Financial Literacy (or FinLit, for short) Financial literacy is the ability to understand and use various financial skills, including personal financial management, budgeting and investing. At Service Credit Union, part of our mission is to provide the resources and tools needed to optimize our members’ financial well-being. We believe in the power of education, and sharing that education with our members so they can achieve their highest potential.

expenses and other assets that could be converted to cash in less than one year.

To accomplish that goal, Service CU recently introduced an interactive, mobile-first financial education resource, EVERFI Achieve. It is available, free of charge, to our members. EVERFI Achieve offers a robust library of information about how to manage finances, including timely training for “Building Financial Resilience” and “Financial Wellness in Uncertain Times.” That resource, says Service CU’s VP of Marketing Wendy Beswick, “gives our members the tools they need for a better future.” For more on EVERFI, visit

Depreciation: A non-cash operating expense that reduces the value of a tangible asset as a result of wear and tear, age or obsolescence. Depreciation is recorded in the financial statements of an entity as a reduction in the carrying value of the asset in the balance sheet and as an expense in the income statement.

FinLit Terms You Should Know Amortization: A non-cash operating expense that reduces the value of intangible assets (such as patents, trademarks or goodwill) in a systematic manner. Amortization is recorded in the financial statements of an entity as a reduction in the carrying value of the intangible asset in the balance sheet and as an expense in the income statement. Break-Even Analysis: A calculation of the approximate sales volume required to just cover costs, below which production would be unprofitable and above which it would be profitable. Break-even analysis focuses on the relationship between fixed cost, variable cost and profit.

Current Liabilities: A balance sheet item that equals the sum of all money owned by a company and due within one year. DBA: Doing Business As — generally a trade name such as “Bob’s Burgers” is used, instead of the legal name of Blocker & Sons LLC.

Guarantor: The legal entity and/or person who guarantees an obligation and has a legal duty to fulfill it. Income Statement: Shows the entity’s income and expenses (similar to a profit and loss statement). Liabilities: A financial obligation, debt or claim, i.e., notes payable and accounts payable. Limited Partnership: A business organization with one or more general partners, who manage the business and assume legal debts and obligations, and one or more limited partners, who do not participate in dayto-day operations and are liable only to the extent of their investments. P&L (Profit and Loss Statement): Also considered as income statement or statement of earnings. Measures Net Income or Loss over a defined period of time. In addition, having the simple formula of Revenues – Expenses = Net Income/Loss.

Collateral: Assets pledged by a borrower to secure a loan or other credit, and subject to seizure in the event of default.

S-Corporation: A form of corporation, allowed by the IRS for most companies with 35 or fewer shareholders, which enables the company to enjoy the benefits of incorporation but be taxed as if it were a partnership.

Current Assets: A balance sheet item that equals the sum of cash and cash equivalents, accounts receivable, inventory, marketable securities, prepaid

Working Capital (WC): The amount of current assets that is left after all current debts are paid.

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Service Credit Union’s Online Tools Make It Easy Financial Literacy: The EVERFI Achieve program is a digital financial literacy library designed to help you better manage your money. Our interactive library consists of 30 training sequences, ranging from 3-6 minutes each. Improve your financial wellness through a variety of topics such as credit cards, building emergency savings, retirement, homeownership and more. It is designed for mobile devices or tablets, so you can learn anytime, anywhere.

Managing a Small Business: Understand the financial fundamentals of managing a small business. This training sequence includes developing a business plan, small business banking services, small business financial statements, how businesses obtain and use credit, and financial well-being for entrepreneurs.

Business Banking Services: Take care of your business needs with a full suite of banking services: business checking, business savings, business online banking, bill pay services and more. Download a business membership application.

Budget Template: A free template can make creating a budget less daunting. Smartsheet offers budget templates for everything from a business to a household.

Online Transactions: View all of your Service CU transactions online, access electronic account statements and deposit checks remotely. If you have a checking account with Service CU, you can pay bills online. Sign up for online banking.

Financial Counseling: Service CU partners with GreenPath Financial Wellness, a national nonprofit organization, to give our members access to free financial counseling. The GreenPath certified counselors equip you with the knowledge and tools to lead financially healthy lives. You can learn how to ease financial stress, manage debt, save for the future, make informed decisions and achieve your financial goals.



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