Monday, March 02, 2009

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

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