The Working Capital Journal - AEX Commercial Financing Group

Friday

05Mar2010

A Long and Winding Road for Commercial Loans

It is almost always helpful to have realistic expectations of what lies ahead. Our purpose in describing current efforts by small business owners to obtain commercial loans as potentially being a long and winding road is to emphasize the recent confusing and unpredictable state of commercial banking. While there are new (and effective) commercial lending options that will satisfactorily fill the business funding gap for many small business owners negatively impacted by their current ineffective commercial bankers, the eventual success of these alternatives will depend on the unique financial circumstances for a specific business.

Either because banks do not want to publicly admit that they are not making small business loans or perhaps due to their changing guidelines for making such loans, it has not been unusual for commercial borrowers to wait for one to two months before their bank finally declines to make a commercial loan that had appeared to be a mere formality when the lending process began. As we stated, it is wise and prudent for small businesses to anticipate the long and winding road that lies ahead for even the most ordinary business financing request.

Stephen Bush |

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Monday

25Jan2010

The Working Capital Management Puzzle

A continuing theme in The Working Capital Journal during the past two years has been an analysis of the increasing challenges which now impact working capital financing for small businesses. For some commercial borrowers this situation probably resembles a confusing working capital management puzzle in which the level of difficulty keeps changing.

The puzzle comparisons have become even more relevant when evaluating the impact of fewer banks to provide small business financing. To most business owners seeking working capital in a more hostile commercial banking environment, it must seem like some of the required puzzle pieces are missing in action. In actuality this perspective is fairly accurate because many banks which were previous sources of commercial financing for small businesses have indeed left the playing field. To continue the working capital management puzzle analogy, here are two practical options for business borrowers:

Seek help to find the “missing pieces” in the form of alternative lending sources
Reduce business financing requirements (comparable to now needing fewer pieces to complete the puzzle)

As with any complex working capital financing situation, all realistic business financing options should be thoroughly evaluated with the help of an experienced commercial finance expert.

Stephen Bush |

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Monday

04Jan2010

Refinancing Working Capital and Business Loans

Complications in refinancing working capital and business loans are occurring frequently in the current irregular bank lending environment. Because of these ongoing difficulties, commercial loan refinancing is a prime example of the need for small business owners to explore new working capital and commercial mortgage financing solutions.

While business loan refinancing is still possible, there is a growing consensus that it has not been so difficult for several decades. Some commercial finance situations lend themselves better to refinancing than others. SBA financing, business opportunity loans and replacing an existing business line of credit are three scenarios that are especially difficult to refinance.

Whatever the specific financing situation for a small business, commercial borrowers should be better prepared if they approach the process with a realization that there might not be the usual obvious solutions to refinancing business loans. Before the end of their current efforts to refinance business debt, it seems likely that most businesses will need to consider both new business financing programs and new commercial lending sources.

Stephen Bush |

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Friday

18Dec2009

What Went Wrong with Small Business Financing?

Small business owners will be more likely to avoid serious future business finance problems with working capital management and commercial real estate loans by exploring what went wrong with business financing and commercial lending. Especially if they need help finding realistic small business finance options, this is a critical issue for most commercial borrowers.

Business owners should be prepared for the banks who caused the recent financial chaos to say that nothing has gone wrong with commercial lending. Nothing could be further from the truth — and if small business owners and commercial lenders choose to ignore the many mistakes recently made by business lenders, as noted in a popular phrase we may be doomed to repeat these mistakes. Despite contrary views from bankers and politicians, most objective observers would agree that the multiple mistakes made by banks and other commercial lenders were serious and are likely to have long-lasting effects for commercial borrowers.

A link to a longer discussion of "What Went Wrong?" is provided in the right-hand column of The Working Capital Journal. Please contact AEX Commercial Financing Group directly for assistance in avoiding circumstances such as those described in the overview.

To close on a positive note, there are practical small business financing solutions available to business owners in spite of inappropriate commercial lending practices currently seen almost everywhere.

Stephen Bush |

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Saturday

05Dec2009

Working Capital Financing

It is not an exaggeration to say that obtaining working capital loans has routinely become a tug-of-war process for most small businesses. Working capital financing is simply not available from many banks.

In a promising development, the dysfunctional banks are being rapidly replaced by more effective commercial lenders. We are seeing new and practical small business finance options emerge to fill the void left by banks which have abandoned commercial lending (especially working capital financing). Many small businesses are qualifying for these new working capital management programs because inappropriate bank underwriting criteria have been replaced by a more relevant business cash flow analysis. There is usually a short turnaround time for obtaining working capital if a business qualifies for this straightforward and practical small business financing program.

The primary challenge for many small business owners will be to quickly conclude that their prior banking relationship is no longer what it was just a few months ago. By moving forward promptly and choosing new commercial lending sources that are capable of operating in this new small business finance environment, business owners will find the new working capital loan options to be a substantial improvement over previous bank financing in a surprising number of cases (this is the silver lining in the working capital financing cloud hanging over most commercial borrowers).

Stephen Bush |

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Monday

16Nov2009

Small Business Loan Success With Guerrilla Financing Options

The necessity of resorting to guerrilla loan tactics has been accelerated by the decreased performance of commercial lenders in providing effective and realistic small business finance programs.

To help commercial borrowers achieve small business loan success in an increasingly hostile commercial banking environment, AEX has published a report that is designed to serve as a short survival guide for business owners when they are seeking business financing. These suggestions should be considered by most commercial borrowers in the early stages of their commercial financing search due to the growing failure of banks and other lenders to provide a normal level of business funding — so while the actions described in this AEX report might be seen as a last resort to be undertaken only when all else fails, we view them as a prudent starting point.

In the current dysfunctional commercial lending climate, business borrowers should not hesitate to do whatever it takes for their business to survive. A link to the AEX "Survival Guide" is provided in the right-hand column of The Working Capital Journal.

Stephen Bush |

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Wednesday

04Nov2009

When to Fire Your Commercial Lender

Since the banking meltdown, most of us are now reluctantly admitting that banks and other commercial lenders are just not the same.

In a manner similar to many automobile manufacturers that are now a tarnished and shriveled version of what they once were, it seems like almost overnight most commercial banks and small business lenders have lost our confidence. In this shifting reality, business owners are now forced to adapt quickly to a changing environment for small business loans. Candidly speaking, even if a business lender is their best friend, small business owners are increasingly realizing that they must look out for their own best interests because it is unlikely that their commercial lender is up to the task anymore.

As if we needed to be reminded that business lending is on life support (lenders and politicians are not likely to ever admit this publicly), the largest small business lender in the country has recently sought bankruptcy as the solution to their own serious problems (CIT Group). Firing your commercial lender has become both a necessary and more acceptable solution when your business is not able to obtain adequate business financing from existing commercial lending sources.

We have published a report to help highlight some of the issues for this critical problem. Please see the right-hand column of The Working Capital Journal for a link to this candid assessment about "Firing Your Banker" or other ineffective business lenders.

Stephen Bush |

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Friday

23Oct2009

How to Reduce Small Business Finance Fees

The ability to keep small business financing fees at an appropriate level is the key to financial success for most businesses.

However, in the current rugged commercial lending climate, many lenders are taking advantage of the situation and grossly overcharging for their business finance services. Such a greedy mentality by commercial lenders should not be acceptable to any commercial borrowers regardless of their situation.

Here is what we are doing to resolve the situation to the best of our ability: (1) AEX Commercial Financing Group is currently providing free business financing analysis (which is usually more candid, practical and effective than most other sources). (2) AEX is not charging any upfront fees for working capital financing. (3) In addition to eliminating fees for all working capital management services, AEX has also reduced fees for commercial loans and business consulting.

The three AEX actions for reducing or eliminating commercial finance fees are intended to be in the spirit of “We’re all in this together” because AEX Commercial Financing Group recognizes that most businesses are experiencing unusual working capital problems.

While AEX will not always be able to provide the specific business financing help that a business owner is looking for, we will usually know if we can be helpful after a brief candid conversation. Our business finance services are available to small business owners located throughout the United States.

Stephen Bush |

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Wednesday

14Oct2009

New Directions for Small Business Financing Services

Small business financing is heading in a new direction. The journey for small business loans is likely to have all the adventure and uncertainties experienced by a wagon train over a century ago. As historians know, wagon trains often encountered serious obstacles even when they were led by expert wagon-masters. What we are seeing now with commercial financing and working capital loans also suggests that results for commercial borrowers will be confusing, uncertain and painful at times. With commercial loan expert help, small business owners should have better results but should still anticipate unexpected challenges along the way.

One of the key factors impacting the new directions for small business financing is that banks and other commercial lenders have changed so dramatically in a very short period of time. These changes are not expected to be temporary in nature. With multiple bank examples, the new directions for commercial borrowers are not optional or voluntary. In most cases, if business owners do not quickly move in a new direction for their business financing, they will be without reliable working capital financing and commercial loans.

Because commercial lending is extremely competitive, new lenders have emerged to replace the old ones. As business financing moves in a new direction, the banking industry is beginning to resemble other aging industries such as automobile manufacturers. While the similarities are probably not welcomed by many bankers, small business owners will now find that their business finance and working capital financing choices might have improved as a result.

Stephen Bush |

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Monday

05Oct2009

The Bad Banks and Good Banks

We have published "Good Banks - Bad Banks" to help small business owners find the increasingly smaller number of good banks while avoiding the growing number of bad banks. A link to this report can be found in the right-hand column of The Working Capital Journal. As noted in our analysis, commercial borrowers should be prepared to act more aggressively to protect their own financial interests. Each business owner should conduct their own results-oriented assessment of which bank(s) can provide an appropriate level of business financing and working capital help for their unique business situation.

Stephen Bush |

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