07/29/2010
Watching Regulation Come in Through the Front Door
As regulation and oversight continue to increase the scrutiny applied to many commercial loan processes, we see its consequences as potential borrowers are turned down.
In somewhat breaking news, federal bank regulators approved a two-year old requirement passed by Congress that calls for Loan Officers to register into a federal database across the nation.
According to the Associated Press story, Loan Officers who are employed by any bank regulated on a federal and state level must comply.
By the end of the year, all fifty states are expected to participate, increasing the level of regulation not only vertically, but also horizontally through the front doors of banks.
While this may help assuage consumer fears in the wake of banking reputations that arose from the recent economic meltdown, how does it really affect our industry, especially our small niche of small-balance commercial lending? Is this kind of effort, money, and regulation as effective as it seems? We’d like to hear your opinion.
07/27/2010
Is the $30 Billion Small Business Aid Package Just Another TARP?
There are criticisms against the latest proposed small business aid program that it might just be a community version of the Troubled Asset Relief Program (TARP).
According to Inc., the Senate voted 60-37 to attach the $30 billion program to go before the Senate once more this week in an attempt at generating what’s projected to be nearly $300 billion in leveraged small business loans.
On a national lens and in the shadow of TARP, it looks like another bailout. However, as small business financing specialists, we know that this money is in demand by the entrepreneurs and owners who need it as operating capital, as property acquisition capital, or as equipment leasing capital.
This money is borrowed to make ends meet, to launch new products or services, and to meet payroll and tax expectations. When businesses can breathe, production continues. Jobs and progress proceed as small business owners push through these troubling economic times.
What are your thoughts and opinions? Only by vocalizing what you see and feel in your own community can we dissipate the misconception held by the mainstream media that it’s “just another bailout.”
07/22/2010
A Look beyond the Usual: Small Biz Boss Loans
Let’s take a moment to look at lending beyond the industry.
The Wall Street Journal wrote a piece on small business owners who lend money to their employees to help them catch up with other fees.
The article touches upon different examples of small loans, such as one employer who lends around 25 different loans, up to $4000 each, to help his employees make ends meet.
Another entrepreneur, who felt a strong bond with their employees, lent around $12,000 in separate loans to her 12 employees.
Due to the strong relationships between owners and employees, these loans are often repaid in full. It builds a strong relationship and loyalty between employer and employee. It also develops a strong reputation for the company when word of the generosity hits the media.
This act is a great illustration of the depth that some small business cultures can achieve.
Though these are examples outside of our industry, and more on a community level, it does break the constant stream of negative news that industries based on lending receive as of late.
It’s refreshing. It makes us wonder, “What equivalent good can we do for our different constituencies?”
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