|| Print ||
YOU CAN BLAME THE CREDIT CRUNCH in part for our recent economic woes, but now that recovery seems in sight, are loans loosening up? In this environment, how can businesses get the money they need to grow?
"Oregon is still looked at as being a fairly tight credit market because of the high unemployment, tremendous foreclosure rates, and the number of small and larger businesses that have failed in this cycle," says Brad Copeland, chief credit officer at Umpqua Bank. "Banks are being very careful and watching very closely."
But there is still money out there for businesses that need it. They will just have to jump through more hoops than in the past to get it. Wary lenders are pointing a more discerning eye at business borrowers. First and foremost, they'll want to see good management and a sound business plan.
"If that isn't there, it will be a tough deal to put together from the start," Copeland says.
Dan Hempy, president of the greater Portland market for Pacific Continental Bank, says lenders also want to know that all of a company's financial ducks are in a row. Even a company with a working capital line of credit that was monitored informally in the past may be required to present a borrowing base certificate when they renew.
"They will probably encounter a heightened level of concern by the bank," Hempy says. "There may be a desire by the bank to find ways to tighten up financial reporting or require
Borrowers can also expect to get hit with stricter underwriting criteria, tighter loan covenants and higher loan-to-value ratios.
"There will be more equity required by the borrower to get that loan," Hempy says.
There's little appetite among lenders for speculative real estate deals,
but there are opportunities to refinance commercial properties, Copeland says. With federal stimulus money pouring into the Small Business Administration, there are more options available for small businesses, too. Rates are also attractive right now but are likely to creep up over the next year or two.
The key to getting the money you need, Hempy says, is to maintain a strong relationship with your banker and talk openly and honestly about any concerns.
"Don't hide from them if you're having problems," he says. "Your banker will work with
you as much as they can. They want to see you be successful, too."
Real Time - Oregon Business
Tweets by @OregonBusiness
|Will Medford Ever Be Cool?|
|The Carbon Calculus|
|Raising the Stakes|
|Which Way to Chinatown?|
|The Human Factor|
Is your business ready to join us in the call for action? This opening panel includes Oregon businesses who will discuss why they signed the Oregon Climate Declaration, the investments they are making to reduce carbon emissions, and how their actions are affecting their companies.
Get ready for two days of special events produced with the EPA, Portland Timbers and ISOS before and after the GoGreen Conference on October 16.
hubbub health uses behavior change science to rethink wellness programs.
In Ashland, a public-private partnership results in online resources to help diversify the local economy.
How sports tourism is driving economic growth and making cities across Oregon a better place to live.
If you have given a former employee access to your company’s electronic information by virtue of assigning a desktop or laptop computer and you suspect he or she of having taken electronically stored data, there are several steps to follow to preserve electronic forensic evidence from spoliation.
The official launch will be Jan. 14.
In a switch on the traditional trade show, representatives from UO departments and local and state agencies will host tables to connect with businesses and vendors. The fourth Reverse Vendor Fair will take place Wednesday, Feb. 25, in Eugene.