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Finding Credit in Tight Times
Kelly Kearsley
There’s no doubt that lending standards have tightened over the past few years —
and appropriately so, say those in the banking industry. But for creditworthy
borrowers there’s money to be had.
“Money has been available to viable businesses. The key
word is viable. The problem has not been a supply issue
for banks making loans, but a demand problem.”
—Bob Seiwert, ABA senior vice president
ONE WORLD TRADE CENTER AND NUCOR STEEL.
RED,
WHITE
AND BLUE,
AND
GREEN.
In fact, the American Banking Association reports that banks originated $1.5 trillion in new loans over the past year. The same report notes that according to Federal
Reserve data, businesses are using more of their credit lines to fund operations, and
commercial and industrial loans have increased for several consecutive months.
“Money has been available to viable businesses. The key word is viable. The
problem has not been a supply issue for banks making loans, but a demand problem,” said Bob Seiwert, ABA senior vice president and head of the organization’s
center for commercial lending and business bankers.
Seiwert, also a former bank CEO, said that many of the business owners seeking
loans right now are in distress because their companies weren’t capitalized enough
to weather the downturn or are starting new businesses because they lost their jobs.
They are less palatable to bankers, who are seeking more sure bets in uncertain
times. Meanwhile, more bankable business owners seem to be waiting out the
economy before embarking on projects funded by loans.
He offered a few tips for business owners seeking credit:
• Have a relationship with your banker. This means finding someone you feel
comfortable telling the good and bad regarding your business. Trust allows a
banker to go to bat for you when it comes to getting credit.
• Get to know bankers at several institutions. The recession affected banks in different ways. The reason you are turned down for a loan may have little to do with
you and more with the bank’s available capital and current mix of loan types.
• Understand how bankers make their loan decisions. The ABA website has
articles aimed at demystifying the process.
• Be willing to put your own money into your company. Banks are in the business of making loans, not equity investments. Finding 100 percent financing
from a bank for a business venture is unlikely.
• Conserve your cash.
• Review the viability of your business plan, given the new economy.
American Banking Association:
www.aba.com
Seiwert said that most banks
are looking to make loans. Developing a relationship with your
banker increases your chances of
getting that credit.
“If we possibly could make a
loan, we will,” Seiwert said. “That’s
how we make money.”
With the construction of
One World Trade Center,
a symbolically planned 1,776-foot-tall
building on the site of the old
World Trade Center, the rebuilding
of America has begun.
And the rebuilding is going to be green.
Because One World Trade Center
will be using about 53,000 tons of
recycled Nucor Steel, helping to make
it eligible for LEED® certification.
Saying we not only care about
restoring America to great heights,
we also care about the world around us.
www.nucor.com
It’s Our Nature.®
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