Topics include knowing your bank, SBA options, private finance, preparation
NORTH BAY – "Don’t let turbulent times stop you: Financing your business in a challenging environment" was the title of and the message given to small business owners during a panel discussion with four North Bay financial industry veterans in cooperation with the Business Journal.
Each panelist came with a specific area of expertise to the conference, sponsored by Circle Bank, Ghirardo CPA and Warren Capital Corp. A summary of each of their presentations follows.
[caption id="attachment_15237" align="alignleft" width="108" caption="Pat Kilkenny"][/caption]
Mr. Kilkenny is the owner of Kilkenny Advisors, a business finance consulting firm. He has 40 years of financing experience and is currently the president of the Sonoma County Alliance. Mr. Kilkenny addressed the issue of today's financial institution environment and how banks differ in the current economic time.
“The composition of the loan portfolio is the major difference in the health of financial institutions,” he said.
Keeping in mind that the bank or lender has stress points in their balance sheets that make everything different is important, he said.
What can you as a business do, he asked. Prepare.
When looking for credit, know who you are talking to, know your risk profile and understand your lender's stress factors.
He recommended checking out the bank's financials and that seeking multiple lenders will increase ability for financing.
[caption id="attachment_15238" align="alignleft" width="108" caption="Clay Stephens"][/caption]
Founder and chief executive officer of the North Bay’s leading specialty finance company, Warren Capital Corp., Mr. Stephens spoke on the topic of non-bank lending.
Warren Capital has been around for 25 years and has completed more than 3,000 transactions for a total transaction value in excess of $1.5 billion, $400 million in the North Bay.
He discussed the shift in lending in the last 30 years. In 1978, he said, non-bank lenders had only 29 percent of the loan market while commercial banks had 71 percent.
In 2008, however, the commercial bank share had dropped to 35 percent and non-bank lenders were up to 65 percent.
He said that the non-bank lenders have always been competitive in rates and the knowledge of specialty markets adds value.
Non-bank lenders offer equipment finance and vendor sales financing, and they work with traditional bank lenders and offer corporate finance. However, they do not offer unsecured lines of credit, construction loans or consumer loans.
He recommended being proactive—whether you are looking into commercial bank financing or non-bank financing—and knowing what options are out there.
[caption id="attachment_15241" align="alignleft" width="108" caption="Michael Rice"][/caption]
Senior vice president and business lending manager with Circle Bank, Mr. Rice has more than 25 years of experience in commercial lending and equipment leasing. He talked about financing solutions for small business through enhanced SBA programs, which he said are beginning to see more activity.
He discussed the enhancements to the SBA 7a and 504 loans through the recovery act this year and how the new standard operating procedures could impact small businesses looking for financing.