Cash Flow, Debt, & Refinancing for Virginia Small Business Owners

Are you wondering if you should refinance a small business loan? Many businesses experienced the unexpected last year, and now it’s time to get back on track or strengthen your existing operation. Small business debt consolidation or refinancing could be an important part of your strategy this year. In this article, we’ll explain how to refinance business debt, cover the pros and cons, and show you how to get started. If you have any questions, call us at (540) 896-8941.


What is Debt Refinancing?

Get to know more about debt financing and its potential benefits for your small business's finances.

When you refinance debt, you take out a new loan (usually with better terms and/or interest rate) and use it to pay off the old loan. The main benefits of refinancing include saving money on interest, reducing your monthly payment amount, and/or changing the loan term.

When it comes to business debt, consolidating your existing loan(s) with a lower-interest commercial loan can boost your cash flow by lowering your monthly payment and shortening your repayment period.


What to consider before refinancing small business debt

Depending on what you are looking to get out of your debt refinance, there are different factors to consider.

There’s more than one reason to consider refinancing your small business loan(s). Perhaps the payments you’re making on your current business loan primarily go toward interest rather than principal. Refinancing your business loan, also known as debt consolidation, can help you qualify for a longer-term loan with more affordable rates. Here are the most important factors to consider before applying:

  • Debt refinancing does involve paying interest on any interest already compounded in your current loan.
  • Does the loan you’re looking to refinance have prepayment penalties? Check the fine print first.
  • Have interest rates fallen since you took out your current loan? Consolidating your business debt into a lower interest loan could free up extra cash to put toward other needs and expenses.
  • Has your total debt level changed since the original loan was made? Business lenders will want to know the debt-service coverage ratio (DSCR) for your company. DSCR is used to calculate your business’s solvency and ability to repay your debt. So if you’ve taken on more debt recently, you may have trouble qualifying for an attractive refinance loan.

Now that you’ve considered different factors, your ultimate decision should depend on what you’re hoping to get out of your debt refinance. For example, in spite of a downside, loan consolidation may still be the right move for your business if you’re looking for a longer repayment term, lower interest rate, and/or less frequent payments.


5 Questions to ask your business lender about debt refinancing

Your business lender can help guide you to a better understanding of debt refinancing and its relevance to your business.

When pursuing any kind of business loan, including debt refinancing, don’t be afraid to ask questions. Your business lender is here to help you review all business loan options and find the best solution to meet your needs. Here are some of the things you may have questions about:

  • How long will my new loan term be?
  • What are the closing fees?
  • Will the loan have a fixed or variable interest rate?
  • Is there a prepayment penalty?
  • If I don’t qualify for debt refinancing now, what can I do to improve my application next time?


Debt Consolidation vs. Refinancing

Debt consolidation and debt refinancing are sometimes used interchangeably, but there are differences between the two.

While debt consolidation and debt refinancing can be used interchangeably, there are some differences between the two. Here’s what you need to know:

  • Debt consolidation is a type of debt refinancing.
  • The purpose of debt consolidation is to take several different loans or credit card balances and pay them all off with one new loan.
  • Debt refinancing generally takes one loan and replaces it with a new one to achieve a better interest rate and loan terms.
  • The process of applying for debt consolidation or refinancing is the same. You’ll need to provide basic information about your business’s financial situation and credit history. You’ll also need to list the debt(s) you will be paying off with the new loan.


Pros and Cons of Debt Refinancing

It is important to consider both the benefits and the potential downsides of debt refinancing.

As with any big financial decision, it’s important to weigh the pros and cons first.


Potential Downsides of Refinancing

  • Prepayment penalty: Does your current loan have a prepayment penalty? If so, how much? You may still save more in interest by refinancing, but it’s something to check out. Also, if you really need to reduce your monthly debt payment to improve your cash flow, it may still be worth paying the prepayment penalty.
  • Getting stuck in a debt cycle: If this isn’t your first time refinancing, you may want to take a closer look at your business’s financial situation. Will refinancing this time help you pay the debt off or are you just perpetuating a debt cycle for your business?


Benefits of Debt Refinancing

  • Lower your monthly payment to improve cash flow and invest in your business.
  • Lower your interest rate to save money and off your debt faster.
  • Potentially improve your credit score
  • Refinance into a larger loan to take “cash out” and invest in your business or meet working capital needs.


How does debt refinancing work?

Your business lender is here to help you review all business loan options and find the best solution to meet your needs.

To start the debt refinancing process, apply for a new business loan from your business lender. At F&M Bank, we offer a variety of business loans, including small business financing through the SBA and traditional term loans for qualified borrowers. And as a longtime community bank, we are dedicated to investing in and supporting small businesses throughout the Shenandoah Valley. Our business lenders pride themselves on building lifelong relationships with clients.


Learn more about debt refinancing from F&M Bank!

Since 1908, F&M Bank has been offering business banking services in the Shenandoah Valley and beyond. Trust the future of your business to our expert lending team. Wherever you are in the Shenandoah Valley, from Harrisonburg to Staunton, you can contact a member of our team or visit one of your local branches in Augusta, Page, Rockingham, or Shenandoah county to learn more about debt refinancing or to apply for a new business loan today.

Our friendly and experienced business lending team is ready to answer your questions and help you make the best choices for your company. Have questions? Get in touch today!

F&M Bank Participates in United Way’s Day of Action

By JILLIAN LYNCH Daily News-Record

For nonprofits, anything that can save money to channel it more effectively toward the cause is a go.

Small improvements, like painting a wall in the office, landscaping or donating old equipment are jobs that take up time for nonprofit workers themselves or money to hire labor to complete them, which can take away from their mission.

During United Way of Harrisonburg and Rockingham County’s annual Day of Action on Wednesday, volunteers took to local nonprofit organizations, like Big Brothers Big Sisters of Harrisonburg-Rockingham County, The Arc of Harrisonburg and Rockingham and the Boys and Girls Clubs of Harrisonburg and Rockingham County to complete acts of service for the organizations, so they can focus their resources on serving the community.

“United Way is a macro-level organization that works with a lot of community issues from a 30,000-foot view, if you will,” said Laura Toni-Holsinger, executive director of the local United Way. “During the pandemic … we’ve seen firsthand how human service organizations have had an increase in the need for their services. That sort of thing takes a toll when you’re in that for 15 months plus.”

The annual event, which has been going on for more than 45 years, is organized by United Way, whose vision is “strategically convening community partners to create measurable social change.”

“This day is a nice reminder to [the nonprofits] that there’s a lot of people in their corner … supporting them,” Toni-Holsinger said. “Even if it’s moving some furniture today or painting a bunch of walls … I think anything that we can do to spread some joy and light and encouragement is important.”

United Way changed the name of the event, formerly known as the Day of Caring, this year to better reflect its impact, according to Toni-Holsinger.

She said the day often results in a compound effect: first volunteers help improve the nonprofits, but the service opportunity also connects the volunteers with the mission behind the group they’re helping.

That often leads to greater connections between the community and nonprofits.

“We changed the name of Day of Action for people … as a call to action. So not just for people to learn and serve today but to … get involved in the community all year-round. And that’s what we’re already seeing,” Toni-Holsinger said. “[Through Day of Action] people are volunteering at a nonprofit and learning about an issue and later get involved as maybe a volunteer or a donor or a board member.”

The Day of Action, which saw over 600 volunteers in 2019, was hosted virtually this year and featured a virtual opening ceremony with guest speakers Odicci Alexander, former James Madison University softball pitcher, and Robert Anthony, an amputee, athlete and motivational speaker.

Heather Denman, executive director of The Arc of Harrisonburg and Rockingham, an organization that promotes inclusion and human rights of people with intellectual and developmental disabilities, guided a group of volunteers through a list of tasks that assisted in condensing administrative space into former programming space to cut costs as more services take place in clients’ homes and less often in the programming space.

“Most people think of United Way as a funding agency, but they do so much more,” Denman said. “[Day of Action is] a really important day to connect with volunteers from the community, have more folks learn about [the Arc’s] mission and what we do, and basically make new friends.”

Holly Thorne, director of marketing for F&M Bank, came along with a team of co-workers to volunteer at the Big Brothers Big Sisters office, painting and refurbishing the newly christened conference room. Thorne said she’s worked with F&M Bank in Harrisonburg for nine years and has been involved with United Way’s day of service each year.

“There’s so much need in the community,” Thorne said. “And that’s one thing about [F&M Bank] — it’s a community bank so it’s part of our big focus: helping where we can, when we can. Our team is really committed to doing this sort of thing and volunteering on boards, and being members of civic organizations is very important to us.”

This year, the day also included virtual workshops with topics including “What the Heck is Happening in Our Community for Affordable Housing?” hosted by Our Community Place, “Value of a School Garden Program,” hosted by James Madison University, and a presentation by the Valley Program for Aging Services on being a part of the “Dementia Friends” program.

More service projects were planned for the day, but outdoor projects were rescheduled for later due to the rain.

Lindsey Douglas, executive director of Big Brothers Big Sisters of Harrisonburg-Rockingham County, said the Day of Action provides much value to the nonprofits.

“It is always helpful,” Douglas said. “When you’re a nonprofit, you’re trying to make the most of every dollar and really put it back into the community and for us, put it back into the impact of one-to-one mentoring. And so when staff or paid helpers don’t have to do jobs like painting or organizing, then they can put more of their energy towards actually implementing services. It helps every dollar donated to the organization go further.”

The Day of Action also kicks off United Way’s annual fundraising effort.

Toni-Holsinger said money donated goes to United Way’s work to support the ALICE population in Harrisonburg — people who are working, but struggling to make ends meet — and to the nonprofit’s mission of connecting community groups in meaningful ways.

Courtesy of Daily News Record

Benefits of Banking Local for Small Businesses in the Shenandoah Valley

Small business owners encounter many challenges in running a local business—banking shouldn’t be one of them. If you’re looking for the best bank for small business, look no further than Main Street. Your local bank offers the same products and services as the bigger banks, but with more flexibility in making lending decisions and saving you money on interest and fees. As reported by a 2020 Community Banking Study from the FDIC:


“Community banks provide their local communities with valuable products and services, including offering various loan products to business owners and developers, small businesses, and farms … Community banks also continue to meet the credit needs of less economically vibrant areas, such as rural counties experiencing population outflows.”


So, whether you are a relatively new small business owner looking to build a banking relationship, or you’re not satisfied with your current lender and looking for better rates/terms, keep reading to learn all the benefits of banking locally for small businesses in the Shenandoah Valley.

Personalized Banking Experience

Choosing a local banking and lending partner for your small business allows you to have personalized service to support your needs and business goals.

One of the biggest decisions you can make is how to choose a bank for your business. When you choose a local bank like F&M for your business banking needs, you get more than a banker or lender. Instead, consider us the newest member of your team. We build relationships with our business clients to support your needs and growth throughout the life of your business.

So, what does a personalized banking experience look like?

  • Anticipating your individual needs
  • Customizing loans and other services to meet your needs
  • Providing information and advice to support your business goals
  • Making ourselves available when you have a question

With personalized service, you are never just another account number. It saves you time to work with a local bank that knows your community and your business’s place in it. By anticipating your individual needs, we can make recommendations before you even realize it’s time to take the next step. Take it from Barren Ridge Vineyards in Fishersville, Augusta County:

“We have found F&M Bank to be everything a local bank should be: a bank that heard our story and believed in and supported our vision.”

Plus, we care about the same things you do. From volunteering with local charities to cheering for our kids at local sporting events, don’t be surprised if you run into your local business banker outside of the bank!

Customized Financing with Competitive Rates

Many small businesses and farmers choose local financial institutions as their preferred lender for multiple reasons, including flexibility and knowledge of the local community.

When it comes to lending options for small business, local banks represent more than their share of the market:

“Community banks represent 15 percent of the industry’s total loans but 30 percent of its CRE loans, 36 percent of small business loans, and 70 percent of agricultural loans,” according to the same FDIC study. This shows that while local banks may have a relatively small footprint, they are the lender of choice for many small businesses and farmers. Let’s take a closer look at the reasons why:

  • Local banks often have more flexibility. With lending decisions made locally, there is more flexibility to lend to small businesses and customize financing.
  • Community banks offer lower fees and interest rates. In part because they are locally owned, local banks are able to help businesses save money on loan rates and fees for other business bank accounts and services. Every dollar saved makes a difference to a small business.
  • You don’t have to give up convenience. Local banks tend to offer the same perks and services as bigger banks such as online and mobile banking, remote check capture, credit card processing, and more.
  • We understand local needs and concerns. Community banks are part of the local economy, which thrives when local businesses are thriving. That’s why we are often able to approve small business loans that would likely be rejected by bigger banks.

As you can see, it pays to build a relationship with your local banker. When you need financing, we will make every effort to provide you with affordable loan terms and rates.

Community Focused, Just Like You!

When you choose a local bank for your business banking and lending needs, you are also reinvesting in the community.

If you’re still wondering, should I bank locally for my small business lending needs, keep in mind that the money you put into your local bank through deposits and interest paid on loans gets reinvested in your community through other loans and donations to nonprofits.


“F&M Bank is an exemplary model of what it means to be a community bank. Their support and involvement with local business and nonprofits is unparalleled, and we are proud to partner with them,” writes Kristi Williams, President & CEO United Way of Staunton, Augusta Co. & Waynesboro (SAW)

Local banks support the community in many ways, such as sponsoring local sports teams, financing construction in the community, and helping small businesses get on their feet and grow. So, when you choose a local bank for your business banking and lending needs, you are also reinvesting in the community. Larger banks often lack those social ties and interconnected relationships with the local economy and community.

Partner with F&M Bank for your business banking needs!

Are you looking for the best business lender in the Shenandoah Valley? For the past century, F&M Bank has helped local businesses like yours grow and thrive. Whether you’re expanding, remodeling, or making a business move, we tailor your loan to meet your needs. Our team walks you through the process and guides your experience with the personable attention your business deserves.

To get started, visit or call one of our convenient locations across Augusta, Rockingham, Shenandoah, and Frederick counties.


Protect Your Business from Check Fraud with Positive Pay from F&M Bank

More and more people are falling victim to financial fraud and check fraud can affect your small business as well. While many business owners have simply stopped using checks, many of those same customers continue to use checks to pay their business expenses.

So how do you protect yourself and your business from fraudulent checks? If ceasing to use or accept checks in your business is not an option, there are other ways to prevent check fraud from impacting your business.

One way is to add Positive Pay to protect your commercial checking account.

→ Positive Pay matches the account number, check number, issue date, payee and dollar amount of each check presented for payment against a list of checks previously authorized and issued by your company.

→ Each time a check or series of checks are issued, a file of those checks containing the check number, issue date, payee and dollar amount is uploaded into online banking by your company. If a potential fraud occurs, you will receive an alert in online banking and be prompted to approve or reject the payment

→ Ways to reduce false positives and therefore work load of company employees:

  • Upload files of issued checks as they are dispersed. Any check not uploaded to the system presented for payment will reject;
  • Follow font best practices and guidelines (as shared by F&M Bank)

Interested in learning more? You have options!

Contact your local banker 

Reach out to us online

Use the Support feature when you are logged into online or mobile banking to start a conversation.

F&M Bank Corp. Announces Appointment of Three Board Members

Timberville, VA (September 2, 2021) – F&M Bank Corp. (OTCQX:FMBM), parent company of Farmers & Merchants Bank, announces the appointment of three new corporate members as of the July 2021 meeting of the board of directors. The new members are Daphyne Saunders Thomas with James Madison University; John Willingham with Stoneridge Companies; and Hannah Hutman with Hoover Penrod, PLC.

“Our Board of Directors is comprised of a dedicated team of community leaders committed to providing strength, stability and longevity to the businesses and communities of the Shenandoah Valley,” said Mark Hanna, President and CEO of F&M Bank Corp. “We are excited to channel Hannah, Daphyne and John’s talent, expertise and energy into furthering our mission and vision.”

Daphyne ThomasDaphyne Saunders Thomas served as the endowed Adolph Coors Professor of Business Administration chair until her retirement and is currently a professor emerita at James Madison University.  A graduate of The Washington and Lee University School of Law, she joined the College of Business faculty in 1981, and completed her MBA at JMU.  Thomas earned her undergraduate degree at Virginia Tech. She currently teaches graduate classes for James Madison University for the Executive Leadership MBA and for the Master of Accounting programs. She was a co-founder and co-director of the CyberCity Summer Program, a nationally award-winning summer technology program for middle and high school students from underrepresented populations. Thomas also previously chaired the Harrisonburg Electric Commission and is a former chair of the Harrisonburg/Rockingham Community Services Board. She currently serves on the boards of numerous non-profit organizations, including Sunnyside Communities, The Explore More Children’s Museum, The Community Services Board Halfway House, The JMU College of Visual and Performing Arts Advisory Board, The Harrisonburg/Rockingham Child Daycare Center and The Community Foundation of Harrisonburg/Rockingham Grants and Scholarship committee. Previous gubernatorial appointments include service on the Commonwealth Transportation Board, the Jamestown Yorktown Foundation, the Outstanding Virginian Day, and the Selective Service System Board.  She serves on the audit and ORC committees of the F & M Corporate Board.


John Willingham

John Willingham
, CPA, is President of Stoneridge Companies, a multi-faceted real estate development, construction and realty company based in Winchester, VA. Additionally, he is the President of Total Remodeling, a regional sunroom and outdoor living contractor. Previously, John was a business banking manager and senior commercial lender for Wells Fargo, CFO of a publicly traded community bank, and was in public accounting with Yount, Hyde and Barbour, P.C. and PricewaterhouseCoopers.  He currently serves as Chairman for the Frederick Winchester Service Authority and is a member of the board for Grafton Integrated Health Network. Previously, he served 12 years as a City Councilor for the City of Winchester and was President of Council for 5 years.




Hannah HutmanHannah Hutman is a partner at the law firm of Hoover Penrod, PLC, in Harrisonburg. Her practice includes representing creditors, trustees, and debtors in bankruptcy proceedings and insolvency related matters. Hannah has represented national and regional banks in all aspects of commercial loan transactions and collections, including restructuring obligations, asset liquidations and dispositions, and foreclosure. Hannah is a member of the panel of Chapter 7 trustees for the Western District of Virginia.  In addition, Hannah provides legal counsel and services in entity formation and governance matters, financing transactions, contracts, and business asset transfers.  She is a former Chair of the Board of Governors of the Bankruptcy Law Section for the Virginia State Bar. Hannah is “AV” rated by Martindale-Hubbell, has routinely been listed in Super Lawyers as a Rising Star, selected as a member of Virginia’s “Legal Elite,” and included in the American Bankruptcy Institute’s 2018 class of “40 under 40.”  She received her J.D. from the Marshall Wythe School of Law at the College of William and Mary in Williamsburg, Virginia and her B.A, summa cum laude, from Columbia Union College in Takoma Park, Maryland.  Hannah lives in Harrisonburg with her husband Matt and two sons.