Niamh Kristufek discusses her role as President - Specialty Finance of First Business Bank as well as challenges the industry is facing, including tariff, economic uncertainty and building client relationships at a specialized bank.

You joined First Business Bank earlier this year. What inspired that move, and what opportunities do you see in your new role that differ from your previous experience?

What drew me to First Business Bank was their focus on commercial businesses. They're not trying to be everything to everyone, so they're excellent at what they do. I was also immediately struck by the entrepreneurial spirit here. The team approaches challenges with a roll-up-your-sleeves mentality that I find energizing.

I appreciate the real sense of ownership at First Business Bank. People don't just stick to a narrow job description—they take responsibility for finding creative solutions for clients. That's refreshing in banking, where sometimes processes can become rigid.

In my new role, I get to work across multiple specialty areas: accounts receivable financing, equipment finance, floorplan financing, and SBA lending. This gives me a unique chance to find ways these groups can learn from each other and collaborate on client solutions. Our specialty finance groups operate nationwide, so I'm excited about the opportunities to develop business across the country while maintaining a personal touch that's harder to deliver at larger institutions.

The size and structure of First Business Bank means I can have a more direct impact, move faster, and bring ideas to market more quickly. That's a big change from my previous experience, and, honestly, it makes coming to work exciting every day.

Can you give an overview of First Business Bank’s Specialty Finance group?

We provide niche C&I lending services to businesses that need financing solutions outside standard commercial banking. We bring together several specialized lending areas—accounts receivable financing, asset-based lending, equipment finance, floorplan financing for auto dealers, and SBA lending. Our teams operate nationwide, extending beyond our bank's primary Midwest footprint.

What makes us different is our commitment to understanding how your business operates. We don't just look at financial statements and check boxes. Our team asks questions about your business model, industry challenges, and where you're headed next. This deeper understanding lets us structure deals that make sense for where you are now and where you want to go.

I'm particularly proud of our team's industry knowledge. When you work with us, you're getting financing professionals who speak your language, whether that's in manufacturing, transportation, healthcare, or dozens of other industries. We've seen the ups and downs of different business cycles and know how to create financing that holds up through those changes.

The most satisfying part of what we do is watch clients use our financing to take on opportunities they might otherwise miss. That could mean acquiring a competitor, expanding facilities, or simply managing cash flow more efficiently during growth phases. We're built to be responsive and flexible when those moments arrive.

How do current tariffs and trade tensions impact borrowers’ inventory strategies, and how is that influencing the way lenders like First Business Bank approach floor plan and inventory financing?

We're seeing our clients respond to tariff uncertainty in several ways that directly impact their inventory management. Many of our clients are carrying higher inventory levels as a buffer against supply chain disruptions. Others are diversifying their supplier base across different countries to minimize tariff exposure, while some are accelerating purchases of critical inputs ahead of potential tariff implementation dates. Most of our clients are planning for higher costs in general and testing if current strategies still make economic sense.

At First Business Bank, we take a consultative approach with clients facing these challenges. Instead of simply financing whatever inventory strategy they present, we're digging deeper to understand their production cycles and customer commitments. Sometimes, that means suggesting a combination of financing solutions.

The most important thing we're doing differently is maintaining closer communication with clients. With tariff situations changing rapidly, we need more frequent conversations to stay on top of how these external factors are affecting their business operations and cash conversion cycles. This helps us adjust our financing solutions in real time rather than waiting for problems to develop. It's another area where our size is an advantage — we can quickly adapt our approach based on changing conditions without navigating layers of approval.

With continued uncertainty around interest rates and economic forecasts, how are you advising clients to think about capital structure and liquidity in 2025?

We're encouraging our clients to focus on flexibility and resilience in their capital structure. The days of counting on stable, predictable interest rates are behind us for now, so businesses need to prepare for multiple scenarios.

We're also having frank conversations about the mix between fixed and floating-rate debt. With all the speculation about where rates might go, some clients want to lock everything into fixed rates right now. Others are tempted to stay completely floating to benefit if rates decline. In most cases, we're advising a balanced approach, perhaps fixing rates on longer-term assets while keeping flexibility on working capital lines.

What's most important is stress-testing your financial projections against different interest rate environments, modeling what happens to their cash flow if rates move up or down significantly. This lets them make informed decisions rather than reacting emotionally to headlines.

The businesses that will thrive in 2025 are the ones planning for multiple scenarios today. That might mean setting up additional financing relationships before you need them, negotiating more flexible terms with your existing lenders, or adjusting your growth plans to preserve capital. Our specialty finance teams are particularly focused on helping clients find the right balance between seizing growth opportunities and maintaining financial stability during this uncertain period.

What are some key challenges your clients are facing right now in terms of supply chain, inflation, or growth, and how is your team helping them navigate these?

The biggest challenge we're seeing across our client base is the unpredictability of their business environment. Supply chain uncertainty due to trade policy and the geopolitical environment are leading to concerns about inflation and the general performance of the economy.

Labor costs continue to be a major pressure point. Many of our clients have had to increase wages 15-20% over the past couple of years, and they're struggling to pass those costs on to their customers without losing business. This margin compression is forcing some tough decisions about which products and customers are truly profitable.

On the growth front, we're seeing a real divide. Some clients are hesitant to expand given the economic uncertainty, while others see this environment as the perfect time to gain market share or acquire struggling competitors. The challenge is determining which approach makes sense for each specific business.

Our team is helping clients navigate these challenges in several concrete ways. For supply chain issues, our accounts receivable financing and asset-based lending solutions provide the working capital flexibility needed when inventory levels must increase, or payment cycles extend. We're structuring these facilities to expand and contract as conditions change.

To address margin pressure from rising costs, we're helping clients analyze their customer and product profitability more granularly. Sometimes, this leads to difficult decisions about exiting certain business lines, but it's better to focus resources on where they deliver the best returns.

For clients pursuing growth, we're providing acquisition financing with creative structures that protect against downside risks. Our SBA Lending team is particularly active here, helping clients leverage government guarantees to secure favorable terms even in uncertain conditions. On the flip side of large acquisitions, our Equipment Finance teams are helping clients seeing more demand for smaller ticket project-specific equipment.  These purchases are being made in more real-time versus long-term planning in the uncertain current environment.

What sets First Business Bank apart is our willingness to dig into the details of these challenges with clients. Our specialty finance professionals have deep industry knowledge, so the conversations go well beyond typical banking discussions about rates and terms. We're helping clients think through the strategic implications of these challenges, not just the financial ones.

You've worked at large institutions and now at a more specialized bank—how does that change the way you build client relationships or structure deals?

A good banker is all about taking care of clients — really listening to their needs and providing expert advice and guidance to help them succeed. That holds true at both large and small institutions.

The advantage we have in a more specialized business bank of our size is that we don't work in silos. Our bankers, regardless of expertise, know each other across private wealth, treasury management, commercial banking, and our specialty finance groups. This makes it easy to bring a team of experts to the client as it just feels natural, as opposed to the bankers in large organizations needing to research to find partners in other divisions.

Our decision-makers are also very close to the customer—it's not uncommon to find our head of credit or CEO out meeting with clients and prospects. This makes deal structuring faster and more customized than many other banks can provide. When clients have unique needs or face tight deadlines, this direct access becomes incredibly valuable. They're getting a financial partner who can mobilize the right resources at the right time.

What advice would you give to emerging leaders in the secured finance industry, especially women looking to grow into executive roles?

First and foremost, be maniacally good in your current role. Strive to be known as the best in your company. Then, do your work faster, so you leave time in your work week for stretch projects where you can learn different roles outside of your day job. These additional experiences build your skill set and help you understand the business from multiple angles.

Second, constantly learn about your clients and the industry. This makes you more valuable, keeps you curious, and helps you gain insights to make you a better business developer and help guide you into your next role. Ask questions at every opportunity and make connections between what you're seeing in different parts of the business.

Lastly, seek out mentors that you can trust and who will give you honest feedback. Hopefully, this mentor has a chance to observe you in meetings or with clients. Ask for this feedback and be open to change. Remember, no one sitting in an executive role did it alone. The most successful leaders I know are those who actively seek different perspectives and use that input to grow.

Building your reputation for excellence creates opportunities while expanding your knowledge base, and accepting guidance helps you make the most of those opportunities when they arrive.