03/11/2010
Community Bank Strategies
The relationship between community banks and small business is critical to maintain. While bigger bank formulas cannot comprehend the subtitles of small business risks, community banks have the means and level of understanding to secure loans for small business.
Stacy Mitchell’s piece from February on the Huffington Post reinforces the trend and belief that small businesses are the key to bringing us out of the recession. Her article, “The Only Way to Restore The Flow of Credit To Small Businesses” examines big banks, the Small Business Administration Loan Programs, and community banks’ efforts to help out struggling small businesses.
She states that “By drawing on qualitative information – getting to know the borrower, learning about the business, and understanding the local market – small banks can better assess risk and successfully make loans to a wider group of small businesses.” This is very similar to a private money mindset. However, private money isn’t exactly the first thing that comes to mind to a borrower who needs a loan solution. Often, they turn to their local bank. Due to the down markets however, these can be very difficult conversations to have.
While a bulk of her article weighs in on the function of SBA loans and recovery, her insight on the community bank/small business relationship explains how these local banks have the right mindset on how to attain new business and refinancing. We strongly believe that private money should keep their eyes peeled and learn from these community bank tactics. Private money can be a sound argument in those difficult conversations between community banks and struggling small business.
03/09/2010
On the Front Lines
As we make our way out of the wake of the recession, many financial marketers are pushing solutions of recovery. One in particular is JP Morgan’s big promise that they will dedicate $10 billion to small business loans:
(source: The Baseline Scenario)
According to The Baseline Scenario’s article, ‘The PR War,’ JP Morgan’s definition of “small business” can change by the quarter. Are these small businesses the same ones with risk factors that usually turn off the bigger banks?
Check out the article to see correlations between the ads claim and their actual quarterly data.
This is some bold marketing talk. Usually it’s the community banks and private money entities that fight for small businesses on the front lines. We are usually picking up those who have fallen off the conventional financing wagon.
How will big promises like these shake up our scenarios within 2010?
03/04/2010
Bright But Foggy Road
We may hear about delinquencies slowing and loan prices rising, but how does that really change industry professionals’ forecast of 2010?
Articles like Housing Wire’s “Commercial Mortgages Showing Signs of a Brighter Road Ahead” inspire industry members to think positively for the upcoming year. Pieces like these that push innovation within finance, how lenders can provide their services, and how they can revolutionize the way these businesses come to market.
The piece states that loan values and investments are growing, despite the risk that many smaller businesses (who cannot afford to lose) have inherently. While the trends may look one way to analysts, what does it look like to the smaller private money firms? To brokers?
Sound off on your perspective.
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