Wednesday, February 10, 2016
After almost six years in commercial banking, I have returned to advising growing businesses throughout the USA on a wide variety of asset based funding solutions.
Companies who can benefit from my services are often non-bankable credits who lack access to capital for reasons including short time in business, hyper-growth sales, weak cash flow and highly leveraged balance sheets. These companies will typically have revenues of $500 thousand to $30 million and will have B2B accounts receivable, inventory and equipment that can be offered to a lender as collateral for repayment of a loan.
If your business has receivables, inventory and receivables and needs over $50 thousand of financing, please contact me at 310-344-2522.
Friday, March 12, 2010
One reader not only rejected Bank of America's denial of the guidance, but commented on the "parrot-napping" as well.
In an unrelated cost savings move, Bank of America has announced that any pets seized in a property foreclosure action will, in the future, be served on the lunch menu in the employees’ cafeteria.
Wednesday, February 24, 2010
I'm trying to figure out why this article was front page headline worthy for The Wall Street Journal no less. It's old news.
Senior bank lending officers have been reporting for two years about tightening credit. In fact, they tightened credit so much, they can't tighten any more.
Many banks are still amongst the walking wounded due to troubled commercial real estate loan portfolios. Yesterday, the FDIC announced its problem bank list hit a 16 year high of 702 troubled institutions. Many of these banks will likely fail and others will be unable to lend in support of an economic recovery for a long time to come. The FDIC shuttered 140 banks in 2009 and 20 banks year-to-date 2010.
In the meantime, the Commercial Finance Association (CFA) just released its Quarterly Asset-Based Lending Index, Q4 2009, revealing continued stability and signs that U.S. businesses are seeking alternative sources of stable funding from non-bank, asset-based lenders. In the fourth quarter of 2009, total committed credit lines grew by 1.2 percent among asset-based lenders, while 50 percent of respondents reported an increase in new credit commitments.
By the way, Harry Reid's stripped down jobs bill just stripped out additional funding for SBA small business loans. The original $85 billion "jobs" bill included additional funding for the SBA to continue offering small businesses enhanced loans guarantees and elimination of guarantee fees. The SBA just exhausted its $855 million of stimulus funds which it claims resulted in over $20 billion of loans to small businesses in the last 12 months.
Notwithstanding all of the backwards looking news, I am seeing the green shoots of recovery. A couple of very large banks may be feeling the populist pressure to pump up lending and are adding to their lending teams. Even Huntington Bank, notwithstanding five consecutive quarters of losses, has announced it is doubling its annual small business lending and has announced it will originate $4 billion of new loans in the next three years.
Need help finding the right lender or telling your story the right way for your California business? Read "Matchmaking for Business Loans" and give me a call!
Tags : small business , bank loans , SBA loans , asset based loans , Commercial Finance Association , Huntington Bank
Thursday, February 04, 2010
According the Journal, asset based lending may have increased by double digits in 2009 after an 8.3 percent increase in 2008. Given the article was focused on small business, it would have been more interesting had the Journal been able to learn the percentage growth of asset based lending for deal size less than $10 million.
The Journal notes that drawbacks of asset based loans include relatively high interest rates. Asset based loans can range as high as 35-40 percent per annum when a borrower is using factoring or purchase order financing. However, there are some lenders that will provide asset based loans at rates in the single digit range. Even the SBA has a program that provides asset based lines of credit at rates currently below 10 percent!
Also this past week, the Federal Reserve's January 2010 Senior Loan Officer Opinion Survey on Bank Lending Practices was released.
Tuesday, February 02, 2010
The largest portion of the growth, 3.4 percentage points, came from businesses shrinking inventories more slowly than in the previous quarter to accommodate increased demand. Shrinking inventories means increased production to prepare for future sales increases.
One can argue about how much of the inventory buildup came from one-time events such as government stimulus programs, but one thing is clear. Businesses will have to increase inventories as the economy recovers.
Where will the money come from to fund the inventory growth is a bigger question.
Wednesday, January 20, 2010
Here are the highlights from my perspective:
- The October 30, 2009 (the night before Halloween) guidance issued by the FDIC and other regulators has made it very easy for banks to extend and restructure commercial real estate loans that otherwise could have been classified as troubled assets.
- Commercial real estate values will likely drop to 50 percent of their peak values as cap rates increase from 6% to 9%.
- There is a HUGE shortage of capital available to re-finance all of the commercial real estate loans maturing in the next three to five years due to the implosion of the CMBS markets and balance sheet challenges faced by the commercial banking community.
- Low interest rates are keeping a lot of commercial real estate loans from going into default. Look for the Federal Reserve to keep benchmark rates low for the foreseeable future.
- Deal flow for commercial real estate loans and investor opportunities will not recover until the unemployment rate starts to drop.
- All four panelists opined that commercial real estate values will continue to decline in 2010.
If you were looking for some good news from last night's meeting - well, they served a very nice chardonnay! Crisp, refined and a hint of pear.
I've still got some commercial real estate bridge lenders actively pursuing loan opportunities of at least $1 million. Give me a call if I can help!
Wednesday, January 06, 2010
Access to capital remains a big question for how the economy will fare in 2010 according to 52 percent of respondents.
Three out of four respondents think the commercial real estate industry will fare the worst in 2010 as debt matures and lenders remain reluctant to refinance.
"Overleveraged balance sheets are one of the primary causes of industry problems," said William K. Lenhart, CTP, a partner with BDO Consulting in New York. "In 2009, many lenders were more willing to 'extend and amend' terms so borrowers were not in default. It is unclear if these companies took this opportunity to improve operations, reduce expenses and sell off underperforming assets to reduce debt."