Wednesday, October 31, 2007

Happy Halloween!

May the lenders you approach only offer you treats and no tricks! And beware of black cats dressed as pumpkins!

If your lender offers you a trick rather than a treat, read "Matchmaking for Business Loans" and give me a call!

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Angel Investors - Not Just Tech Anymore

Angel investor groups are expanding their investment outlook beyond tech and Internet start-ups according to The Wall Street Journal.

To diversify their portfolios and accommodate their investors varied backgrounds, angel groups are branching out into food and beverage makers, consumer product firms and retail stores.

Some of the angel investor groups are even focused on a specific mission. Golden Seeds makes angel capital investments only in companies where a woman holds a central role. 12 Angels Investment Group invests only in firms that help prevent or treat addictions, such as alcoholism.

One thing that has not changed - if you're seeking an investment from an angel investor group, you must still have a viable business model with an exit strategy so that the angel investors can cash out and earn their expected return.

For more information on angel groups including a directory, the article references the Angel Capital Association.

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

Tags : angel investor , Golden Seeds , venture capital , Angel Capital Association

Tuesday, October 30, 2007

Bernanke on Microfinance

Small business lender ACCION Texas is organizing its first Summit on Microfinance in the country and has received a commitment from Federal Reserve Chairman Ben Bernanke to deliver the keynote address.

The summit will be held Nov. 6-7 at the Henry B. Gonzalez Convention Center. Bernanke will deliver his presentation on Tuesday, Nov. 6, at noon. ACCION officials are anticipating upwards of 1,000 people in attendance. He will highlight the importance of microfinance and microenterprise to the national economy.

"Microfinance is a proven and effective tool for getting capital to entrepreneurs," says ACCION Texas Chairman Ken Olson. "The summit will highlight the great work currently underway and, more importantly, bring together leaders to discuss ways to expand the impact of microfinance in the U.S.".

As a microlender itself, ACCION Texas works to provide access to capital to small businesses that do not have access to loans from traditional banking sources.

"ACCION Texas helps low-income people start or grow a business and develop financial knowledge and skills, which, in turn, builds assets and long-term financial stability," founding President and CEO Janie Barrera says.

"ACCION Texas invests in people by giving them a hand up not a hand out," she says.

The San Antonio-based microlender has 11 offices in nine cities in Texas.

Need help finding the right lender or telling your story the right way?

Read "Matchmaking for Business Loans" and give me a call!

Monday, October 29, 2007

Bank of America - Top SBA Lender

Bank of America announced it has been named the top Small Business Administration (SBA) lender in the nation for the tenth consecutive year. Bank of America made 10,878 SBA 7(a) loans with an average amount of $30,863 and totaling $335.73 million to entrepreneurs during the 2007 SBA fiscal year, which runs from October 1, 2006 to September 30, 2007.

I don't know the source on the raw data so I can't tell you how Bank of America supports this claim to a tenth consecutive national championship. It's unclear if this national championship includes the SBA 504 program for real estate loans.

One thing seems clear. With an average loan amount of just over $30,000, Bank of America is serving small business.

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

Tags : SBA , Bank of America , 7a loan , small business

Tuesday, October 23, 2007

SBA Loans - Sixth Year of Record Growth

For the sixth consecutive year, the U.S. Small Business Administration (SBA) set records for the number and volume of the loans it guaranteed in its fiscal year 2007, which ended September 30th.

The SBA approved 110,275 loans totaling about $20.6 billion under its two primary small-business loan programs (the 7(a) and 504) in 2007, compared with 107,233 loans worth $20.25 billion in 2006, according to a news release.

The total does not include an additional $2.65 billion in venture capital funding provided by SBA-licensed Small Business Investment Companies to more than 2,000 small businesses.

About 99,600 loans were approved under the 7(a) loan guaranty program, which most often is used for working capital. That is up from 97,290 loans in 2006. Although the total number of loans increased, the dollar volume fell slightly to $14.29 billion from $14.52 billion.

The SBA approved 10,668 loans worth $6.31 billion under the 504 program, up from 9,943 loans worth $5.73 billion in 2006. Loans under this program are used for the purchase of real estate and fixed assets.

Nearly a third of all loans went to start-ups, and a third went to minority borrowers. In fact, loans to minority groups increased by 7 percent, with the largest increase coming in loans to African Americans, which increased by 23 percent, from 7,238 to 8,903. Smaller volume increases were recorded to business owned by Asian Americans, Native Americans and women, while loans to Hispanics declined slightly. Overall, loans to businesses in under served areas amounted to more than 36 percent of total loan approvals.

No details were included in the press release about the new Patriot Express loan program targeting military veterans.

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

Tags : SBA , Patriot Express , 7a loan , 504 loan , working capital , business loan , small business

Monday, October 22, 2007

Bank Loans Jump Through the Roof!

According to today's Wall Street Journal (Prior Loans, Future Pain?), commercial and industrial business loans has risen at a 52% annual rate since late July. Based upon Federal Reserve data, this increase in business loans is the fastest growth rate for an 11-week period in more than 30 years.

The Wall Street Journal explained this increase in part on banks having to extend loans for M&A activity for which they had committed, but expected to lay off to investors and never hold on their books. Interestingly, the only small business mentioned in the article said that the bank said no - Bank of America declined Morgan Bros. Bag Co. when it requested an increase in its line of credit.

Sure would like to see the report the Journal used as a basis for this report - it's not consistent with the information I hear directly from my bank funding sources in the small and middle markets.

What have you heard?

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

Tags : business loans , credit crunch , small business , Wall Street Journal , bank loans

Friday, October 19, 2007

CFO Prison

I'm always interested in the search terms used to find my blog.

One of the more interesting search terms used today was "CFO prison".

That reader found my posting "CFOs - Pinstripes or Prison Stripes?"

Very interesting...

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

Tags : CFO , CFO prison

Monday, October 15, 2007

We Don't Do Stupid

I recently served on an access to capital panel with Michael Banner, president and CEO of the Los Angeles Local Development Corporation (LDC). A community development financial institution (CDFI), the mission of the LDC is to provide business loans to people and communities under-served by traditional financial institutions.

Targeting distressed communities and under-served ethnic groups (such as Latinos, African Americans and Asians) in the greater Los Angeles area, Banner and his team use a common sense approach to structuring creative loans to solve complicated problems a typical bank might shun. While the LDC may go where others fear to tread, Banner is an experienced banker and proudly claims that “we are prepared to take more risk, but we don’t do stupid”.

Since assuming the leadership role in 1995, Banner has grown the LDC’s assets to over $14 million from $4 million by focusing on business loans which are catalytic in nature. The impact to the community is even greater than the numbers would suggest as LDC often convinces other, more hesitant lenders and socially responsible investors to participate once it takes the lead. The loan amounts range from $25 thousand to over $5 million. The interest rates charged on all loans reflect the risk entailed and are often competitive with interest rates charged on SBA loans – don’t expect to see interest rates lower than what a bank might charge but Banner does say, “we don’t pretend, we just lend”. Success stories include loans to Homeboy Industries’ Silkscreening Division, the Big Saver Foods Shopping Center and Mao Foods.

With a double bottom line focus, LDC always asks how much of a difference the loan makes to the community. As real estate and fixed assets are often a visible symbol of that impact, real estate loans and term loans comprise almost 75 percent of LDC’s total loan portfolio. The balance of the loan portfolio consist of a wide variety of credits ranging from revolving lines of credits, equipment loans, and asset based working capital facilities to middle market borrowers, but LDC often leads participations or co-lends with other lenders to meet the larger borrowing needs of its clients.

LDC can help a business with its business loan requirements in a number of ways and thus serve many more borrowers than one would think given its small number of employees. In addition to being a direct lender, LDC can bring in other lenders as partners, syndicate entire loans and also serve as an advisor in structuring tax exempt loans for the acquisition of business real estate. Well connected within the financial community, LDC can direct borrowers to the right place even when they are not the solution themselves.

Don’t live in the Los Angeles area? More than 1,000 CDFIs operate in low-wealth communities in all 50 states and the District of Columbia. CDFIs can be banks, credit unions, loan funds, venture capital funds, community development corporations or micro enterprise loan funds. All are united in their primary mission of community development. Check out the CDFI website for a similar organization in your neighborhood!

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

Tags : Los Angeles LDC , Michael Banner , CDFI , business loans , SBA

Wednesday, October 10, 2007

Don't Call Them Vultures

According to the LA Times, the good times may be back for the vulture lenders. Oh, excuse me. I meant the investors in distressed debt.

The economic turmoil caused by the sub-prime meltdown and ensuing (and don't call it a) credit crunch, has led to happier times for those in the "loan to own" industry. They expect to be quite busy for some time to come.


Stupid businessmen and the stupid bankers who gave them loans they could never realistically expect to pay back, according to one of the distressed debt investors.

Worried about how to identify which lenders are vultures? Read here!

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

Tags : vulture lender , distressed debt , credit crunch , LA Times , business loans , cash flow problems

Tuesday, October 09, 2007

Daily Breeze - A Penchant for Procuring Loans

Guess which matchmaker for business loans was featured on the front page of the business section in today's Daily Breeze?

That would be Funding 911!

Daily Breeze columnist Muhammed El-Hasan writes a weekly feature highlighting various businesses in the South Bay. The newspaper has a circulation of approximately 70,000 readers in 14 communities located from Los Angeles International Airport to the Port of Los Angeles in San Pedro.

"A Penchant for Procuring Loans" does a great job of explaining how Funding 911 helps companies in need of business loans typically when the bank says no. Usually, these companies are experiencing hypergrowth or might be experiencing cash flow problems. These companies always have assets to offer a lender as collateral including accounts receivable, inventory, equipment and real estate.

If I could make one little change in the article, it would be the following. In some cases, Funding 911 can close business loans in as little as a few days!

The article is available online at the Daily Breeze website.

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

Tags : matchmaker for business loans , business loans , Daily Breeze , Muhammed El-Hasan , Funding 911 , cash flow problems , working capital

Friday, October 05, 2007

PNC - No Credit Crunch

It's official. According to the Fall 2007 Economic Outlook survey of PNC, the bank that small business loves, there's no credit crunch.

According to this just released survey, 87 percent of small and mid-sized business owners who need credit say availability is the same or easier than three months ago.

Approximately 55% of 1,344 owners contacted were from PNC's primary footprint with the balance of those surveyed coming from across the nation.

In case you weren't contacted and the credit crunch is real for your small business, check out Tips for Weathering a Credit Crunch.

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

Tags : PNC , credit crunch , small business

Wednesday, October 03, 2007

Top Five Construction Equipment Lenders

Yellow iron. The equipment financing sources love this stuff. It’s got long useful lives, slow obsolescence and a strong secondary market. From the September issue of a magazine for the leasing industry, here's the top five construction equipment financing sources.
  1. Caterpillar Financial
  2. CitiCapital Commercial
  3. John Deere Credit
  4. CNH Capital
  5. Komatsu Financial
According to the article, these five equipment financing sources closed over 38% of all construction equipment financing deal in 2005 based upon UCC filings. Alternatively, these five construction equipment financing sources funded 73% of the top 25 funding sources.

Interestingly, with the exception of Citicapital, the top five consists of captive finance companies. CitiCapital was not included in the top five bank leasing companies I wrote about earlier. That being said, this list was based upon the number of UCC filings and not the dollar value of equipment financed.

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

Tags : equipment financing , leasing , construction equipment , Caterpillar Financial , CitiCapital , John Deere Credit , CNH Capital , Komatsu Financial

Monday, October 01, 2007

You Don't Qualify

You don't qualify.

These words were still ringing in the ears of a food industry entrepreneur when recently introduced to me by one of the local economic development offices. The still lingering words came from the mouth of a loan broker without further explanation. The loan broker probably looked at this emerging manufacturer of specialty snack foods and decided the company was too small to justify his time.

I saw it differently.

The company had a product that already had market acceptance. It was being sold in two chains of upscale grocery stores including one private label arrangement. Two other major national grocery chains and a major national camping equipment chain had orders pending. Distributors had already agreed to terms. With the right funding solution, this company could grow into a multi-million dollar revenue company in a matter of months.

A few days later, one of my funding sources approved both purchase order financing and factoring of accounts receivable. It's a perfect solution to enable a small business with hyper-growth potential to get the rocket fuel it needs for take-off.

The business owner is overjoyed and has told his sales force to go full steam ahead in pursuit of new orders and accounts.

By the way, the small business owner is also a minority who may qualify for certain advantageous loan programs down the road. In the spring, we'll revisit his situation and see if other asset based funding solutions may be a good fit once he's established his borrowing credentials and created a well diversified customer base.

Has your lender or loan broker said the words, "you don't qualify"? Read "Matchmaking for Business Loans" and give me a call!

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