Monday, December 15, 2008

Lunch with the Chairman

Surviving the financial crisis was the focus of a lunch presentation by Ivo Tjan, Chairman and CEO of CommerceWest Bank. Along with about 75 business owners and professionals, I attentively listened to Tjan explain the origins of the financial crisis, what was getting done in Washington to rescue the economy and what borrowers should know when asking for a business loan.

Here's a few of the points I found most interesting:

  • Shortly after inauguration, the new administration and congress will likely pursue a second stimulus package ranging from $700 billion to $900 billion. It will be heavy on infrastructure spending, not tax rebates.
  • Economic recovery is not likely to occur before fourth quarter 2009.
  • Ben Bernanke is not afraid of taking the fed funds rate to zero.
  • Only three of every ten banks currently have the capacity to make new loans.
  • Banks are focusing more and more on a business' ability to generate cash flow to repay a loan than on collateral.
  • Banks will understand if a borrower's current performance is suffering provided that it is performing better than its peer group and management has identified its challenges and is implementing a plan to address those challenges.
  • To ensure access to business loans, borrowers need to have strong relationships with the decision makers at their respective banks.
Not a bad deal - a lunch which included food to eat and food for thought!

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 : CommerceWest Bank , Ivo Tjan , business loans , credit crunch

Friday, December 12, 2008

Happy Holidays?

I attended the holiday parties for two major business associations this week - the Commercial Finance Conference of California (CFCC) and the Orange County Chapter of the Association of Corporate Growth (ACGOC).

I've been a regular attendee at the annual CFCC holiday party whose membership is primarily asset based lenders. Attendance was down significantly at this year's event to about 200 attendees. A typical year draws well over 300 guests. Why the decrease? Possibly industry layoffs. With restructurings at CIT, Textron, GMAC, Capital Tempfunds and others, perhaps there wasn't as much to celebrate or no one left to celebrate. I also saw very few back office and administrative types compared to previous years. One lender said that the tightened purse strings led them to send only the deal people this year. I also noticed very few bankers in attendance - must have been back at the office filling out more reports on troubled loans.

This was my first year attending the holiday party for the ACGOC. This group's membership has a significant number of service providers to the M&A industry. Attendance was similar to the prior year according to the event coordinator. I spoke with many of the attendees - most acknowledged that their business had declined these last six months. Quite a few mentioned their clients were experiencing cash flow problems and the impact of the credit crunch.

Hope your holiday parties are filled with cheer. Should you 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 : ACG , Commercial Finance Conference of California , Commercial Finance Association

Monday, December 08, 2008

Banker of the Year

This year's recipient of Banker of the Year is Ken Lewis, Chairman and CEO of Bank of America.

Yes the same Ken Lewis whose comment about "stupid bankers" I wrote about in May 2007 and again this past spring. Here's the quote - "we are close to a time when we'll look back and say we did some stupid things".

The same Ken Lewis who is hoping he won't be considered one of those stupid bankers for Bank of America's acquisition of Countrywide and Merrill Lynch.

Two time winner Lewis joins past American Banker honorees including:
  • Kerry Killinger, ousted CEO of Washington Mutual
  • Ken Thompson, ousted CEO of Wachovia
  • Angelo Mozilo, ousted CEO of Countrywide

Congratulations to Ken Lewis and here's hoping he doesn't suffer the fate as the stupid bankers listed above. I meant former honorees.

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 : Bank of America , Ken Lewis , Banker of the Year