Community Banks Angry

It's no surprise that Ben Bernanke and Sheila Bair were targets of ire for the nation's community banks at last week's annual convention for the Independent Community Banker of America according to The Wall Street Journal (subscription required).

Tired of being tarred and feathered by congressman exploiting (perhaps creating) populist rage against bankers, the community banks point out that few of them have pocketed taxpayer money from the TARP program. In most cases, the community bankers stayed away from subprime loans and the other financial exotic products that drove many of their larger brethren to seek TARP funds.

Even Fed chairman Bernanke acknowledged that 95 percent of the nation's community banks were well capitalized at the end of last year. In fact, many of the banks that contact me looking for deals are community banks who have healthy balance sheets. If your business can demonstrate the ability to repay a loan, community banks are actively seeking you out these days.

That being said, you still have to be careful which community bank with whom you choose to conduct business. Of the 42 banks that have failed in the last 15 months, at least half were community banks. Their sin - loans to finance real estate development and construction projects that have gone belly up since the housing market collapsed. I warned you back in September 2006 these chickens could come home to roost.

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 : community bank , real estate loans , TARP , Ben Bernanke , Independent Community Bankers of America

Solving the Banking Crisis

Saturday Night Live's parody of Treasury Secretary, Timothy Geithner, makes it perfectly clear how to solve the credit crunch! Business loans will start flowing soon...depending upon your definition of "soon".

Enjoy this six minute video from Saturday Night Live!



Need help finding the right lender or telling your story the right way for your business? Read "Matchmaking for Business Loans" and give me a call!

Tags : Credit crunch , business loans , Timothy Geithner , Saturday Night Live

Return to Sender

Some regional banks that accepted TARP money are considering an early return to sender according to CFO.com.

Claiming they never wanted the money and may be tainted by having accepted it, regional banks like TCF Financial Corp and Iberiabank have initiated filings to repay the U.S. Treasury the money received under TARP.

Even Ken Lewis of Bank of America has hinted lately he would like to find a way to repay the TARP funds.

I guess the public floggings of bankers, the caps on compensation, the micromanaging of expenses by Barney Frank and the pressure to make loans to non-creditworthy borrowers has proven to be more of a dis-incentive to certain members of the banking community whose balance sheets had plenty of capital to lend.

Or maybe it's just the start of a big game of chicken between the banks and Congress.

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 : TARP , Capital Purchase Program , business loans , credit crunch

Plenty of Money to Lend

There is plenty of money for banks to lend to businesses provided you can demonstrate the ability to repay.

That's the message from one Southern California middle market banker who focuses on companies with revenues in excess of $50 million. His bank is actively making business loans to companies with a track record of cash flow, strong management and a solid business model

Over coffee on Tuesday morning, we discussed that while there are currently 252 banks on the FDIC's Problem List, there are thousands of banks nationwide that are healthy and willing to lend. Many banks never veered from basic underwriting standards - a key reason why they are standing strong in today's market.

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 : FDIC , Problem Bank List , Credit Crunch

Problem Banks List Grows

The news isn't getting any better as the FDIC announced that its "Problem List" grew during the quarter from 171 to 252 banks, the largest number since the middle of 1995.

This top-secret tally of institutions in hot water was announced in concert with the news that the U.S. banking industry spewed red ink to the tune of $26.2 billion in the last three months of 2008, the first such quarterly loss since 1990 during the savings and loan crisis.

With 25 bank failures in 2008 and 12 bank failures thus far in 2009, it's unclear how the banking industry is going to recover anytime soon and begin providing the access to business loans that the economy needs to effect a turnaround.

But don't let these challenges keep you from seeking a business loan. There are still thousands of well capitalized banks that will make loans to businesses that can demonstrate the ability to repay their obligations from cash flow.

And if your business can't qualify for a bank loan, there are plenty of alternative sources of business loans that will make loans to businesses that have good collateral such as accounts receivable, equipment and commercial real estate.

Expect these asset based loans to cost a bit more than bank loans and in some cases much more than bank loans. But, these asset based loans could be the lifeline to help your business survive until the economy recovers and bank lending activities return to normal.

Need help finding the right lender or telling your story the right way for your business? Read "Matchmaking for Business Loans" and give me a call!

Tags : asset based loans , credit crunch , bank loans , FDIC , problem bank list