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Turning Points is dedicated to helping industry leaders survive the current recession and to prepare for success in the inevitable economic recovery.
I got a call recently from a business owner who was in trouble. First we got through the stories about his big mean bank. Then we talked about how great and glorious his business would be if only he could borrow another $800,000. Then we looked at his balance sheet and discussed the lack of rich uncles or friends who might lend him the $800,000.His bank is actually a little mean bank but they can... Read MoreComments (3)
There's often a weird dance between lenders and less-than-stellar commercial borrowers. Banks try to politely say; "Leave" but they never really say it directly. And the poor business owner rarely understands what's being said. The worst lenders skirt the issue trying to be a friendly community lender and instead retract credit without any understanding of the damage they'll cause to the... Read MoreComments (0)
I met three CEOs this summer. Each of them had the same issue although they were all in different industries: manufacturing, printing and retail. They each had a (pre-recession) $20-million company that's now doing around $10mm in sales. All three CEOs were killing themselves trying to get back to $20mm when in actuality that was not the best path forward. I walked in and saw stress, strain and co... Read MoreComments (3)
Usually when a bank wants me to perform an assessment on one of their credits I find a business that is underperforming and an owner who has grown incapable of returning the business to its former glory. This is not the case with my Marvin Zamler. Marvin is nearing 70 years old, already has millions in savings from his last business and obsessively works on the basics of his business every single... Read MoreComments (1)
As one lender told me; "first we saw pricing go then terms, now it's a free for all out there". After hiding through most of 2009, lenders have spent the last few years coming back into the marketplace only to find that money is over-supplied and under-demanded in today's economy. The Federal Reserve's quarterly survey of senior commercial loan officers reports a continued easing of len... Read MoreComments (0)
These questions seem apropos in the current economic environment. And they're not just for CEOs; everyone could benefit by contemplating these issues: Am I adjusting to the New Norm or being complacent with my recovered business? Think this one through; many CEOs who survived 2009 are getting numb to the new normal, not still fighting against it. My simple question is; "In the last 4 years, h... Read MoreComments (0)
Last night I talked to my neighbor, the currency trader, who is more convinced than ever that we're about to see a global repeat of 2008. I won't repeat the explanation because you'll either think I'm nutty or I'll just scare the heck out of you. But, bottom line, he's leveraging everything and going all cash until the bottom - 40% loss in global equities. I'm neither that clever nor apoca... Read MoreComments (3)
Seven months ago my client was presented with their bank's plan of forced liquidation. That's when they called me. Even while charging 10% interest on a fully collateralized loan, the bank had lost patience and was ready to force change. Options from alternative lenders were all in the range of 16% - 18%.Today my client has offers to lend $10million at 3% interest from four strong regional a... Read MoreComments (6)
Good news for troubled companies sweating it out about their next refinancing. Banks continue to "Amend and Extend" their commercial loans and are putting minimal pressure on companies who can continue to service the interest on their debts. According to the most recent TMA (Turnaround Management Association) survey, 60% of respondents expect to see banks as or more accommodating than... Read MoreComments (7)
This is an old trick my Dad taught me as a kid; go into any factory, close your eyes and listen ... Just listen to the noise.If it is a well-run factory you'll hear patterns in the noise. Patterns mean sequencing, which is the basis of all Lean manufacturing principles. A tightly scheduled plant will produce patterns in the noise.Then open your eyes and watch the feet. ... Just watch the worker's... Read MoreComments (5)
Looking at the recent headlines I would say that part of the Gift/Décor industry is roaring back to robust financial health. - Gibson parent declares dividend- Peter Pauper Press launches UK Division- Midwest parent declares dividend- Yankee Candle Gains...- Brandwise makes Inc 500 list- Global Sources revenue rise 29%It sounds great but I think is more of the bifurcation I talked about last ti... Read MoreComments (0)
59% of business owners tried to get financing in the first half of 2010. That sounds like a lot to me and would indicate robust economic growth. Meanwhile Wells Fargo, Bank of America and JP Morgan Chase all report increased small business lending. With strong demand and growing supply we should have the solid economy we've been wishing for.The interesting part of the story is that credit... Read MoreComments (0)