Wednesday, 04 February 2009 00:00

You don’t have to take it from us that it is important to investigate multiple banks when pursuing your business loan. Take it from a guy who was a commercial banker for 30 years. The New York Times recently interviewed former banker Bob Seiwert who is now the senior vice president for a trade group in Washington. Seiwert strongly urged small business to not only maintain a strong, positive relationship with your bank, but to always have a good back up. Don’t assume your bank is the best place to receive your loan.

“Many banks offer small-business loans, but they don’t specialize in them. And some banks only specialize in small-business loans to certain industries. So ask the bankers if they would be open to extending credit to your business, and if so, under what terms. You may find that the loan window is open for you, and you may find that it’s not.”

It’s also easy to let the constant talk of the credit crunch and slipping economy allow you to believe there is simply no money out there—especially if you are a small business. The truth is, there is money out there; it’s just important to know exactly how the credit crunch has affected a given bank, because these effects most definitely vary.

“But the important thing to understand is that there are 8,000 banks in this country, and most of them are well capitalized and open for business.”

MoneyPath can help you find not only those banks that are well capitalized and open for business, but also those banks that specialize in your particular business needs.

Monday, 02 February 2009 00:00

We're frequently asked what is important to a bank to approve a business loan? Last month I had the pleasure to hear some critical answers firsthand from Martin "Marty" McKinley, the president of Wells Fargo Business Credit at Louisville Venture Club. McKinley started his talk citing the common stories of financial demise (Lehman, Bear Stearns, Goldman Sachs) much to the chagrin of the typical-upbeat entrepreneurial crowd. However, he wasn't without humor by saying "I thought a tarp was something you used to cover up a mess and maybe it is." Of course, he was referencing the heavily-debated Troubled Assets Relief Program and acknowledged the funds could help some banks in need. From the wide-ranging economic discussion, I found two key themes of interest: what to expect from banks and how banks can get back on track. In the near-term, McKinley said we should expect the following 2009 business loan trends.

1. More scrutiny and sensitivity testing for traditional asset-based loans
2. Less appetite for cash flow loans with under secured layers
3. Less appetite for term loans based on real estate or equipment
4. Less appetite for underwriting and placing larger transactions

McKinley did not avoid identifying where banks have gone wrong and suggested a few steps to help "fix" asset-based lending such as refocus on strategy, balance sheet construction and restriction of credit. His final two points are very intertwined since banks are re-focusing on improving their own balance sheet and therefore causes a restriction of capital for lending. My translation of these key points are banks will re-focus on analyzing the loan applicant. They want to see good cash flow and collateral. Combine the renewed interest in loan analysis with a lack of credit and the need to find the right bank becomes even more important. MoneyPath's matching system helps you find the lender that best suits your loan. Your nearby branch may not be the best bank for your loan and I hope you let Moneypath help that process.

Friday, 30 January 2009 00:00

I recently came across this post on Twitter that, again, made me note the time involved when trying to acquire a commercial loan:

We all know that in the business world time is money. Time is just as valuable as money and some might say it goes beyond that and time can be even more valuable than money in certain circumstances.

I thought about the person behind this particular tweet and wondered what kind of time and energy had already been put into the efforts to acquire a business loan and how much MORE time and energy would be given before some sort of positive result was gained. How many repeated conversations does this person have to go through with lenders and how many trips to the drawing board have to be made?

With MoneyPath, it is one trip to the drawing board with multiple results that will spare you the repeated conversation. The nine pieces of information you supply MoneyPath saves you those repeated conversations with lenders that turn you down. We hold that conversation for you so you know which banks are worth your time for a more detailed conversation that can bring you to your end goal.