Skip to main content

Whose lending?

Troubled times ahead for everyone it seems. Credit markets still seems to be troubled. The Federal Reserve stands willing to provide liquidity to the markets although modestly. If I was running a pretty profitable business and I needed capital now, could I rely on my existing banking relationship to provide me the capital now?

Here is an article in the WSJ on "Prior Loans, Future Pain?" Link. This article is free, no subscription needed.

I guess the answer might be how much you need and the terms, but wouldn't you feel slighted if you had a banking relationship with your banker for lets say 10 years and you asked your banker to increase your credit line by about an additional 40% and they said no. In this scenario, with all things being equal, of good personal credit and business scores, pretty robust industry growth projections, and business debt to credit ratio of 1.20 or better. What would be the reason(s) for a bank decline? I called and left a message to a banker that I regularly deal with and I also called one of the businesses that was referenced in the WSJ article to see if I could get some feedback on this situation. I will posts their responses if and when they return my call.
Labels:

Comments

Post a Comment

Popular posts from this blog

What to Buy- Foreign vs Domestic funds?

Calm before the storm. At least that's what I've been reading. It seems that there is still not much buying. Much of the buying seems to be just shifting funds from one account to the next. It's called "churning" in broker turns. So, I wanted to see if anyone was buying, you know, new money. I clicked on over the Investment Company Institute website to see if they could shed some light on this matter. Based on their recent reports, "Estimated inflows to long-term mutual funds were $ 12.48 billion for the week ended Wednesday, June 10, 2009 ", versus $ 13.646 billion for the week of June 3. At least it wasn't negative. There is buying. As a matter of fact, buying has almost doubled compared to inflow numbers reported in May. I also noticed that Equity Foreign Funds had a larger percentage increase than other categories while Taxable Bond Funds had a noticeable percentage decrease in inflows as compared to the previous periods. Interesting. Are in...
Post a Comment
Read more

The Old Reality is Still the New Reality

The Old Reality is Still the New Reality  Dodd Frank Illustration   I sat at my desk last week wondering what went wrong. Was I experiencing some type of trading depression? I checked my models, macro numbers, company profits, software, pricing etc. Some of my option contracts were either worthless or were on their way to being worthless.   The pricing of the contracts were not in-line with the actual underlying price of the securities that I was trading. The options' pricing per contract were either priced 40% or more above what the underlying security was worth or priced 40% or more below what the securities were worth. This old reality was still the new reality even after all of financial fixes implemented to fix these same problems that contributed to the financial meltdown in 2007-2008.   The new Dodd-Frank Wall Street Reform and ConsumerProtection Act which was supposed to clean up many of the abuses in the financial system such as accountabi...
Post a Comment
Read more