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By exploring what went wrong with commercial lenders and small business financing, business owners will be better prepared to avoid serious future problems with their working capital financing and commercial real estate financing. This is not a hypothetical issue for most commercial borrowers, particularly if they need help with determining practical small business finance choices that are available to them. Business owners should be prepared for the banks and bankers who caused the recent financial chaos to say that nothing has gone wrong with commercial lending and even if it did everything is back to normal. It is hard to imagine how anything could be further from the truth. Commercial lenders made serious mistakes, and according to a popular phrase, if business lenders and business owners forget these mistakes, they are doomed to repeat them in the future.
Greed seems to be a common theme for several of the most serious business finance mistakes made by many lending institutions. Unsurprising negative results were produced by the attempt to produce quick profits and higher-than-normal returns. The bankers themselves seem to be the only ones surprised by the devastating losses that they produced. After two years of trying unsuccessfully to get someone else to pay for their errors, the largest small business lender in the United States (CIT Group) recently declared bankruptcy. We are already seeing a record level of bank failures, and by most accounts many of the largest banks should have been allowed to fail but were instead supported by artificial government funding.
When making loans or buying securities such as those now referred to as toxic assets, there were many instances in which banks failed to look at cash flow. For some small business finance programs, a stated income commercial loan underwriting process was used in which commercial borrower tax returns were not even requested or reviewed. One of the most prominent business lenders aggressively using this approach was Lehman Brothers (which filed for bankruptcy due to a number of questionable financial dealings).
Bankers obsessed with generating quick profits frequently lost sight of a basic investment principle that asset valuations can decrease quickly and do not always increase. Many business loans were finalized in which the commercial borrower had little or no equity at risk. When buying the future toxic assets, banks themselves invested as little as three cents on the dollar. The apparent assumption was that if any downward fluctuation in value occurred, it would be a token three to five percent. In fact we have now seen many commercial real estate values decrease by 40 to 50 percent during the past two years. For banks which made the original commercial mortgage loans on such business properties, commercial real estate is proving to be the next toxic asset on their balance sheets. In contrast to the government bailouts to banks having toxic assets based on non-performing residential loans, it is unlikely that banks will receive similar financial assistance to cover commercial mortgage problems. As a result, a realistic expectation is that such commercial finance losses could produce serious problems for many banks and other lenders over the next several years. Much to the dismay of all business owners and as mentioned in the next paragraph, many commercial lending programs have already been dramatically reduced.
An ongoing problem is illustrated by misleading lender statements about their small business financing activities. While many banks have routinely indicated that they are providing business financing on a normal basis, the actual results by almost any standard indicate otherwise. It is obvious that lenders would rather not admit publicly that they are not lending normally because of the negative public relations impact this would cause. Business owners will need to be skeptical and cautious in their efforts to secure small business financing because of this particular issue alone.
There are practical and realistic small business finance solutions available to business owners in spite of the inappropriate commercial lending practices just described. Due to the lingering impression by some that there are not significant commercial lending difficulties currently, the intentional emphasis here has been a focus on the problems rather than the solutions . Despite contrary views from bankers and politicians, collectively most 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.
Stephen Bush and AEX Commercial Financing Group provide small business financing options for working capital loans, merchant cash advances and commercial real estate loans throughout the United States.
DC-area developer Jeff Neal gives the Huffington Post Investigative Fund a tour of empty commercial properties just blocks from the Capitol. Hundreds of small and medium-size banks are facing huge numbers of possible defaults by builders who erected thousands of office towers, condominiums and shopping centers with the easy credit available five years ago.
DATELINE: TAUNTON, MA…
Bristol County Savings Bank recently announced the appointment of Robert Skurka as a Vice President of Commercial Lending, based out of the bank’s Pawtucket, RI office. Bristol County Savings Bank is a $1.1 billion mutual savings bank founded in 1846 and headquartered in Taunton, MA, with 10 offices in Eastern Massachusetts and Rhode Island.
In his new position at Bristol County Savings Bank, Skurka will serve the banking and financing needs of businesses in Rhode Island and Southeastern Massachusetts. Skurka has over 25 years of commercial lending and real estate lending experience and was previously a Senior Vice President and Relationship Manager at Webster Bank and Director of Business Banking at First Federal Savings Bank of America (FIRSTFED).
A graduate of the University of Rhode Island with a B.A. in Economics, Skurka received his MBA in Management from Bryant University. Skurka is also a Retired Captain of the U.S. Army Reserve, where he served as Finance and Personnel Officer in the 443rd Civil Affairs Company in Warwick, RI.
In addition, Skurka, is a member of the Turnaround Management Association and Past President and Board Member of the Risk Management Association.
Skurka, a native of Coventry, RI, currently resides in Seekonk, MA.
Bristol County Savings Bank
Bristol County Savings Bank is a full service financial institution offering commercial lending, personal and business banking, and mortgage services. The key words at Bristol County Savings Bank are: “Commitment, Stability, and Community,” values that are combined with state-of-the-art technology to meet the needs of its customers. A dedicated local community bank for over
160 years, Bristol County Savings Bank is actively involved in giving back to all the communities it serves both through financial support and the volunteerism of its people.
Founded in 1846, Bristol County Savings has $1.1 billion in assets, with 244 employees in Southeastern MA and RI. The Bank has 10 full service banking offices located in: Taunton, MA (2); Raynham, MA (2); Rehoboth, MA; Attleboro, MA; North Attleborough, MA; Franklin, MA; Dartmouth, MA; and Pawtucket, RI; two loan production offices located in Taunton and Fall River, MA; and two Educational Branch Offices located at Taunton High School and Attleboro High School.
The Main Office and Corporate headquarters of Bristol County Savings Bank are located on Broadway in Taunton, MA. For additional information please call 508-824-6626, or visit www.bristolcountysavings.com.
Good Commercial Areas In Gurgaon has got immense importance as a corporate hub. It houses a number of industries ranging from IT, ITES, BPO, auto manufacturing, hospitality and more recently the medicine field industries. Along with a well planned infrastructure, it offers globally comparable business houses like IT parks and Business Centers. Commercial centres like Udyog Vihar, IMT Manesar, InfoCity, Pace City etc have only added up to the value of Gurgaon as a commercial hub. A dearth of commercial properties in Delhi, has also burdened the NCR region commercial segment. Though, the supply has been enough till now, the demand is growing at a faster pace. The demand for commercial property is ever rising in the city and day by day and it is becoming the first choice among corporate houses and firms. To cope up with this burgeoning demand for commercial space, many developers have started new projects in the city. In addition to the corporate centres, offices, IT parks, the recent addition of shopping malls have opened new avenues in the retail space segment. Metropolitan Mall, Mega Mall, DLF City Centre, Ambi Mall, Omaxe wedding Mall etc are a few names, that have made the retail market a hotcake in Gurgaon. iValley at Manesar, Cyber Park at Sector 67, Element 9 at Manesar etc., are just to name a few of the new commercial projects in the city. The presence of sundry industries and multi national companies has caused an increment in the property rates. The search for a place, that is appropriate for your kind of business, in a good locality with good infrastructure but still easy on the pocket, is not really an easy task. A thorough market research is mandatory. A good way is to move out of the most popular commercial areas and look for newer avenues. For example, Golf Course is known to be the hub of corporate offices. It is very popular and equally costly. Though, it obviously is always the best place to have an office, with buildings like Vatika Tower, Global Flyover, Vipul tech etc. But, at the same time, it’s quite costly. So, if you are planning to have an office and are ready to get out of the charm of the posh localities, you can find some good economical options e.g., Udyog Vihar Phase-VI or Pace City-II etc. Let’s have a look at the rates of a few localities in Gurgaon, which are appropriate for office space and retail space (shops) and are cost-effective too: Office Space: Area // Average Price per Sqft (INR) // Average Rent per Sqft (INR) Pace City-II // 3952 // 16 Udyog Vihar Phase-VI // 4553 // 43 Udyog Vihar Phase-II // 5159 // 44 IMT Mansesar // 5908 // 15 Sohna Road // 6004 // 76 Retail Space (shops): Area // Average Price per Sqft (INR) // Average Rent per Sqft (INR) Manesar // 9988 // 60 Sohna Road // 10548 // 85 Sector-57 // 10858 // 85 South City-II // 11672 // 65 Palam Vihar // 12621 // 84 The purchase of properties has increased in Gurgaon and will continue to do so. The market is getting stabilized after the downfall of the realty sector. It is high time to invest in Gurgaon properties and expect a good return.
Zamanzar.com is currently ranked within the TOP 10 real estate portals in India according to Alexa traffic rank. Zamanzar.com provides an end to end solution for buying/renting/selling residential or commercial Indian real estate. Zamanzar.com has thousands of property listings for sale and rent in Gurgaon, including residential and commercial resale properties, rental properties and new projects. You can arrange site visits and close the deal with us, if you like some properties. Please visit our Gurgaon home page at http://www.zamanzar.com/Gurgaon-Real-Estate.html
For those who are looking for an excellent way to generate outside income, the commercial real estate industry is a great way to go. Many people have begun to invest in commercial real estate, and since this type of real estate is continually being purchased and sold, it has become an excellent way to invest money for a guaranteed return. Before one becomes involved in the commercial real estate market, it is highly important that they understand the commercial real estate industry and its many surrounding components.
A Basic Definition of Commercial Real Estate
First and foremost, it is imperative that one understands a basic definition of commercial real estate. Essentially, commercial real estate includes various real estate properties that have the potential to be able to generate outside revenue or even income for the owner. Whether the property has immediate potential for generating income or revenue immediately, or perhaps in the future, it can still be labeled as commercial real estate.
A Desirable Investment
Commercial real estate is an excellent choice for investors for a variety of different reasons. One of the main reasons that investors find commercial real estate to be such a pleasing investment is that is brings about both long term and short term financial benefits. In the short term, commercial real estate can help you bring in a better cash flow from the use of the property, and at the same time, in the long run the property will only appreciate in value, which will result in long term benefits should you choose to sell. Most investors also find that there is a lot less risk involved with commercial real estate than there is when dealing with other types of real estate. If you purchase apartment buildings or a strip mall, the risk of your investment will spread out among those who are renting from you, and even if you lose one of your renters, you still will be making money and seeing a return from your investment.
Commercial Real Estate Properties
Another positive benefit of commercial real estate is that the scope of properties that you can invest in is quite large. Commercial real estate includes various different properties that make excellent investments. As long as the building consists of more than four units, it can be considered a commercial real estate property. Commercial real estate also includes other properties such as strip malls, apartment buildings, RV parks, industrial parks, mobile home parks, and commercial centers.
Jobs within the Commercial Real Estate Industry
There are a variety of different jobs that are included within the commercial real estate industry, and all of them benefit from this excellent market. The investors have a very important job within the industry, since it is their money that is being used to make the property develop and become prosperous. Builders too have an important job, and many times they work within the commercial real estate industry to build new structures on commercial property such as apartment buildings or shopping malls. The lenders have a very important job, and they work to make sure that investors get the loans and mortgages they may need to be able to purchase commercial real estate properties. Also within the industry are the brokers who represent the owners and deal with the sales and property transfer issues. Last of all, but certainly not least, are the users who actually put the money in the investor’s pocket.
Financing Commercial Real Estate
Those who are planning on being involved in commercial real estate need to consider how they can finance any commercial real estate purchases. While few people can actually just purchase the property with money they already have, most people are going to be turning to other methods of financing the property. More than likely you are going to need to go to a lender to be able to finance any commercial real estate that you want to purchase, but there are a few things that you can do to make the process smother.
First of all, you will want to make sure that you have a business plan. You need to be able to show the lender why you want the property and how you plan on making it a successful investment. It is also important that you have at least a portion of the money needed for the property saved up so you can show that this is a serious venture and you are ready to make a personal investment in its success. Also helpful is a current appraisal of the property you are considering. This will help show the value of the property to the prospective lender. Having an attorney to help you and to check out legal issues will also be important, and in the end you should always compare several lending offers before making a final decision.
Getting Started
For those who are interested in commercial real estate and the financial benefits that can be enjoyed, there are many ways to get a start in the business. One of the keys to getting started is to glean all the information about the business that you can, whether from reading books, searching the internet, or speaking with friends and business colleagues that may have experience in commercial real estate investing. Checking into the area you live in and getting a look at what kind of commercial real estate is available and what the prices are running can help you begin to get a closer look at the costs and the availability of commercial real estate in your area. Attending zoning and city planning meetings may also give you insights and ideas for getting started as well. Lastly, one of the best things you can do is to start building a network of friends and business acquaintances that already have their foot in the door of the commercial market. Learning from their successes and mistakes can help you on your way to becoming a successful commercial real estate investor.
Tony Seruga, Yolanda Seruga and Yolanda Bishop of http://www.maverickrei.com specialize in commercial and investment real estate. As of May, 2006, they and their partners are managing over $600 million dollars worth of new projects.
“I’m in debt up to my eyeballs” This video does not belong to me – I simply ported it from the lending tree website. Please don’t ask me for originals or DVDs as I do not possess them. I also do not possess the rights to this commercial so please contact Lending Tree if you want to use this video.
Brookfield Properties Corp. — A Real Estate Gem Lost in the Rubble
By Street Authority. Real estate was one of the hardest-hit sectors of the market during the financial crisis, and for good reason. After all, the real estate market caused all of this mess in the first place. Read more » »
Read more on Guru Focus
Bristlecone Supports Newell Rubbermaid’s Global Go-Live of SAP® BusinessObjects(TM) Spend Performance Management
MOUNTAIN VIEW, Calif., June 29 /PRNewswire/ — Bristlecone, a trusted SAP services partner and one of the industry’s most experienced supply-chain business advisors and solution providers, today announced that Newell Rubbermaid, a global marketer of consumer and commercial products, utilized its services to implement the SAP® BusinessObjects(TM) Spend Performance Management application. The …
Read more on redOrbit
INFO-TECH
SECURITY: BlackBerry, Skype, Gmail come under the scanner DATA SECURITY. After banning Chinese telecom equipment, the Government has now put Blackberry devices, Skype services and Gmail under the …
Read more on The Hindu
Brookfield Properties Corporation to Hold Conference Call & Webcast of 2010 Second Quarter Financial Results Friday …
NEW YORK—-Brookfield Properties Corporation announced today that its 2010 second quarter results will be released prior to the market open on Friday, July 30, 2010. Analysts, investors and other interested parties are invited to participate in the company’s live conference call reviewing the results on July 30 at 11:00 a.m. .
Read more on Business Wire via Yahoo! Finance
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