The Commercial Financing Market in 2009

Increasing concerns over commercial lending exposure at regional banks is growing as most experts think commercial lending credit declines will likely increase sharply this year.
Loan losses are on the rise to 1.5% to 2% of all commercial loans this year from around 1% currently. But just because a certain percentage of loans are going bad this doesn’t mean that banks still can’t or won’t lend. In fact rates are low and banks are still lending. Wells Fargo’s report that commercial mortgage refinancing went particularly well in the first three months of 2009 prompted broad feelings of relief among investors who now believe banks may be able to earn their way out of their difficult circumstances. Many regional commercial lenders and banks are going under which is creating more business and more opportunities for the banks that survive.

http://www.bcab.org/2009/07/16/commercial-finance-site-launches-to-help-business-owners-and-commercial-real-estate-investors-reach-capital/

brought by Moishe Alexander, CFC  canadian funding corp CEO

Coal's place.

Somewhere along our collective path, a home stopped being shelter, and became a house. Then it turned into an investment asset. Then a mark of social stature divorced from income or debt. Then an entire financial plan. And then a lot of us got into trouble.

Owning real estate is fine. But property does not a home make.

And just as Chris the new dad in the previous post seemed to confuse the two, so Coal in the note below wrenches us back to basics.

Most of us would not trade places, but many wish we might.

Hello Garth

Been following your blog for quite some time now, you pretty much nail it every time with what you post.  I got smart some 12 years ago and went the RV way of life.  Started out in a small fifth wheel trailer, living at one campground or the other always close to work.  I attached a pic of my current rig, which I paid for in cash last year. A luxury rig and we are very comfortable in this unit, me the wife and a 14 year old.  We park at my business where I own and operate a small truck repair facility for the winter months when I do the bulk of my work.  Seasonal camp in a campground about 10 miles away for the other 5 months of the year.

Business has been about 50 % down this last year.  So I layed off two guys and now it is just myself and my main guy working the shop. Everything I own is paid for and we have no debt, personal or business.  I own my receivables but none the less, we are making no money during this economic slump, but I am in a great position to weather these problems.  The last month or so our sales have picked up and my best scenario is too stay in my shop for as long as I can.  We have about 10 grand to fall back on, not alot, but we have no debt and my recievables are sitting around 40 grand right now with current bills in the business sitting around 10 grand.  I should also say that we got to this point from the economy but also from having to move our shop 4 times in the last year, can’t find a suitable shop, ok right now.  Also our previous trailer burned down last year and we had commercial insurance which paid out 50 %, shit, in ten months we spend 75 grand on two trailers and got back 17.  Big lumps.

My point of all this, is because we chose to live this lifestyle, our overhead in minimal.  I started my business 5 years ago and was able to save and pay out approximately 150 grand for equipment.  Save and pay for my boat, my custom dually diesel truck to pull my fiver, and a vehicle for the wife.  Had I had a mortgage and did like so many others do, finance everything, the last six months I would have lost everything and become bankrupt.  My wife does not work either, but helps out with some paperwork at the business, but mostly a full time mom looking after our 14 year old and also has time for our grandkids.

My mom has owned two houses, and says that every time she owns a house, it takes all the money.  My guy that works for me, has a half million house, and it takes everything he has to keep the boat afloat, wife working, and the parents living there to help. He carries no debt either with the exception of the mortgage, he and I both have not had credit cards of lines of credit for well over 25 years.

Getting close to 50 now and seriously thinking of some property in Northern Ontario where one day I can retire and park my trailer, fish and maybe work part time, have no idea of how much money I will have by then, maybe nothing, hinges on the economy.  Isn’t that a sad thing to say.

So keep up the good work with the blog as I look forward to each post on what you have to say.

Coal

http://www.greaterfool.ca/2009/06/12/big-lumps/
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