By EMILY MALTBY
Wall Street Journal, WSJ.com
Discouraged by big-bank practices and bureaucratic procedures, many Main Street firms have "gone local" with their lenders. Community banks are often more willing than their larger counterparts to conduct business on a handshake because they understand the needs of their neighboring establishments and, in many cases, have underwriters in-house to approve loans.
In exchange, however, those lenders expect more from their borrowers. "It's like that old saying, dig a well before you are thirsty," says Brian Carlson, president of Excel National Bank, a standalone lender in Beverly Hills. "It can take some time before [a banker] says, 'I know this guy and I'm confident he'll do what he says he'll do.' Having that relationship is valuable because if you need $300,000 by the end of the week to take advantage of an opportunity, the bank will jump to get it done."
Here are the three best ways to develop a relationship with a community lender:
To read more... click here.
Wednesday, May 26, 2010
Monday, May 24, 2010
U.S. Banks Post Profits, but Woes Persist
Sherpa--This might be a clue as to why credit is so tight.
By MICHAEL R. CRITTENDEN
Wall Street Journal, WSJ.com
WASHINGTON—A total of 775 banks, or one-tenth of all U.S. banks, were on the Federal Deposit Insurance Corp.'s list of "problem" institutions in the first quarter, as bad loans in the commercial real-estate market weighed on bank balance sheets.
Poor loan performance in other sectors also continued to hurt banks, with the total number of loans at least three months past due climbing for the 16th consecutive quarter, FDIC officials said in a briefing on Thursday.
"The banking system still has many problems to work through, and we cannot ignore the possibility of more financial market volatility," FDIC Chairman Sheila Bair said.
There were 702 on the FDIC's "problem" bank list at the end of 2009 and 252 at the end of 2008.
FDIC officials said they expected the number of failed banks to peak this year after climbing steadily over the past three years. Regulators have shut 72 banks so far this year, more than double the number closed by this time last year. Ms. Bair said regulators were preparing for a steady pace of additional closures through the end of the year. A total of 237 banks have failed since the beginning of 2008.
The failures continue to strain the FDIC's fund to protect consumer deposits, although officials signaled they were confident they had enough cash on hand to deal with the expected spate of failures, without having to assess new fees on the banking industry. The agency's deposit insurance fund stood at negative-$20.7 billion at the end of the first quarter, a slight improvement from the end of 2009.
"We have the necessary industry-funded resources to complete the cleanup," Ms. Bair said, in a reference to the fees that the agency assesses on banks for insuring their deposits.
Banks, squeezed by problem loans and the continued recession, responded by reducing their lending. The industry's total loan balances grew by 3% during the quarter, but the increase was due to accounting changes that required banks to bring securitized assets back onto their balance sheets. Without taking into account these accounting changes, lending would have declined for the seventh straight quarter, as banks cut back across most major lending categories.
To read the full article …click here.
By MICHAEL R. CRITTENDEN
Wall Street Journal, WSJ.com
WASHINGTON—A total of 775 banks, or one-tenth of all U.S. banks, were on the Federal Deposit Insurance Corp.'s list of "problem" institutions in the first quarter, as bad loans in the commercial real-estate market weighed on bank balance sheets.
Poor loan performance in other sectors also continued to hurt banks, with the total number of loans at least three months past due climbing for the 16th consecutive quarter, FDIC officials said in a briefing on Thursday.
"The banking system still has many problems to work through, and we cannot ignore the possibility of more financial market volatility," FDIC Chairman Sheila Bair said.
There were 702 on the FDIC's "problem" bank list at the end of 2009 and 252 at the end of 2008.
FDIC officials said they expected the number of failed banks to peak this year after climbing steadily over the past three years. Regulators have shut 72 banks so far this year, more than double the number closed by this time last year. Ms. Bair said regulators were preparing for a steady pace of additional closures through the end of the year. A total of 237 banks have failed since the beginning of 2008.
The failures continue to strain the FDIC's fund to protect consumer deposits, although officials signaled they were confident they had enough cash on hand to deal with the expected spate of failures, without having to assess new fees on the banking industry. The agency's deposit insurance fund stood at negative-$20.7 billion at the end of the first quarter, a slight improvement from the end of 2009.
"We have the necessary industry-funded resources to complete the cleanup," Ms. Bair said, in a reference to the fees that the agency assesses on banks for insuring their deposits.
Banks, squeezed by problem loans and the continued recession, responded by reducing their lending. The industry's total loan balances grew by 3% during the quarter, but the increase was due to accounting changes that required banks to bring securitized assets back onto their balance sheets. Without taking into account these accounting changes, lending would have declined for the seventh straight quarter, as banks cut back across most major lending categories.
To read the full article …click here.
Buying a Business: 5 Things You Need to Know
Buying a existing business can be easier than starting one from scratch. How to find the right opportunity, raise enough money, and get a good price.
By Darren Dahl
With increasing signs that the economy is improving, and the credit markets beginning to loosen up again, the business-for-sale market is sure to see an uptick. In fact, the number of businesses sold during the first quarter of 2010 rose 6.3 percent over the fourth quarter of last year, according to BizBuySell, an online marketplace for business postings. Sometimes, buying an existing business can be a lot easier than starting one from scratch. What are the best ways to get started? Here are five things you need to know.
To read the full article click here...
Then, let's discuss...
By Darren Dahl
With increasing signs that the economy is improving, and the credit markets beginning to loosen up again, the business-for-sale market is sure to see an uptick. In fact, the number of businesses sold during the first quarter of 2010 rose 6.3 percent over the fourth quarter of last year, according to BizBuySell, an online marketplace for business postings. Sometimes, buying an existing business can be a lot easier than starting one from scratch. What are the best ways to get started? Here are five things you need to know.
- Know what kind of business is right for you.
- Line up your financing ahead of time.
- Assemble a team of professionals.
- Place a value on the business.
- Start looking and spread the word.
To read the full article click here...
Then, let's discuss...
Saturday, May 22, 2010
Sunday, May 16, 2010
INSIDE DISH: Real estate deals central to success for Santorini
By: Mason King
IBJ.com, Inside Dish
Santorini Greek Kitchen, the realized dream of restaurateur Taki Sawi and one of the flagship eateries in the rebounding Fountain Square neighborhood. Growing up in Greece, Sawi developed a love for restaurants and worked his way up from dishwasher to chef. He met his future wife, Jeanette, in 1996 while she was traveling through Greece. One of his first questions to her: "How would you feel about marrying a restaurateur?"
They made their home in Indiana and opened the first version of Santorini Greek Kitchen in 2001 at 1112 Shelby St. in Fountain Square. The small eatery in a leased space was an instant success, but the experience with the $150,000 startup filled Taki with a certain dread. "Never ever put all your eggs in one basket," he says now, recalling putting both his and his mother-in-law's house up as collateral for loans.Sawi was convinced that with only 40-some seats he was leaving money on the table. In 2003, community development corporation Southeast Neighborhood Development secured an $850,000 loan to purchase and renovate a former bar and restaurant space at 1417 E. Prospect St., and signed Sawi to a lease-to-purchase agreement. He since has acquired the much larger space.
The importance of controlling his location is not lost on Taki.
To read more and view a video of Taki explaining how controlling the real estate around him was key to his Santorini's successs ... click here.
IBJ.com, Inside Dish
Santorini Greek Kitchen, the realized dream of restaurateur Taki Sawi and one of the flagship eateries in the rebounding Fountain Square neighborhood. Growing up in Greece, Sawi developed a love for restaurants and worked his way up from dishwasher to chef. He met his future wife, Jeanette, in 1996 while she was traveling through Greece. One of his first questions to her: "How would you feel about marrying a restaurateur?"
They made their home in Indiana and opened the first version of Santorini Greek Kitchen in 2001 at 1112 Shelby St. in Fountain Square. The small eatery in a leased space was an instant success, but the experience with the $150,000 startup filled Taki with a certain dread. "Never ever put all your eggs in one basket," he says now, recalling putting both his and his mother-in-law's house up as collateral for loans.Sawi was convinced that with only 40-some seats he was leaving money on the table. In 2003, community development corporation Southeast Neighborhood Development secured an $850,000 loan to purchase and renovate a former bar and restaurant space at 1417 E. Prospect St., and signed Sawi to a lease-to-purchase agreement. He since has acquired the much larger space.
The importance of controlling his location is not lost on Taki.
To read more and view a video of Taki explaining how controlling the real estate around him was key to his Santorini's successs ... click here.
Friday, May 14, 2010
Friday, May 7, 2010
Know Where You Want To Go... Alice and the Cat
Alice and the Cat: Quotes: Alice in Wonderland
Alice: Would you tell me, please, which way I ought to go from here?
The Cat: That depends a good deal on where you want to get to
Alice: I don't much care where.
The Cat: Then it doesn't much matter which way you go.
Alice: …so long as I get somewhere.
The Cat: Oh, you're sure ...to do that, if only you walk long enough.
Business Sherpa: "Many business purchasers are like Alice when they buy a business as they have no plan or vision for the direction of the business which they have purchased they just want it go somewhere, those who have a plan or vision usually are much more successful, just running the business is not a very good plan, but it will get you "somewhere"--bankruptcy court???"
Alice: Would you tell me, please, which way I ought to go from here?
The Cat: That depends a good deal on where you want to get to
Alice: I don't much care where.
The Cat: Then it doesn't much matter which way you go.
Alice: …so long as I get somewhere.
The Cat: Oh, you're sure ...to do that, if only you walk long enough.
Business Sherpa: "Many business purchasers are like Alice when they buy a business as they have no plan or vision for the direction of the business which they have purchased they just want it go somewhere, those who have a plan or vision usually are much more successful, just running the business is not a very good plan, but it will get you "somewhere"--bankruptcy court???"
Saturday, May 1, 2010
End Of an Era... Paul Paquette
One of my favorite bankers is leaving the profession to follow a different career path. Paul Paquette at Wells Fargo has been one of the area's top SBA lenders. Paul has been known for his diligence, hard work and professionalism. I liked working with Paul as he was quick to give a "yes" or "no" on a deal, and if it was a "yes" he worked hard to close the loan. In addition he was always patient with my "lobbying" about the merits of a transaction. Good luck Paul in your new career!!!!
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