SBA Administrator Karen Mills released a statement on the current state of business lending this week on SBA’s website. In it Mills lauds the recovery of the past three years, culminating in SBA’s record year in FY2010, supporting more than $30 billion in small business lending across the country. Mills also says that business lending is showing new signs of strength. The FDIC recently released data showing that banks had their biggest increase in business lending in four years, and Mills says SBOs are no longer telling her they’re fighting for survival, but needing a loan to take advantage of ne opportunities or expand. She also cited reports from participants in the SBLF that they increased their small business lending by $3.5 billion. Right now, the SBA is working with the country’s largest lenders to streamline their processes and make it easier for small businesses to benefit from SBA programs. “We’re confident that this is just the beginning of the momentum small businesses need to keep growing and creating jobs,” Mills concluded, “Everyone at SBA recognizes that this is a critical time for small businesses, and we’re committed to helping them get the financing they need so they can lay the foundation for an economy built to last.”
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This bankrupt radio host has been trying to speed up his bankruptcy proceedings to save face.
Consumer troubleshooter Tom Martino’s effort to push his personal bankruptcy case to a close — largely by trying to “drive the bus” of a court-appointed trustee whose job is to administer the matter — ran into a skeptical judge who wondered what the radio personality was really up to, the Denver Post reports.
Trying a unique approach to bankruptcy law, Martino filed a lawsuit, called an “adversary proceeding” against Rodriguez, saying he was taking too long to decide which assets were part of the estate to be liquidated and which weren’t. In part, that examination is based on allegations by International Bank, one of Martino’s largest creditors, who said the long-time radio host tried to hide assets by giving them to his wife, Holly, including the couple’s custom-made home in Franktown. But U.S. Bankruptcy Judge Michael Romero said he didn’t understand why the consumer advocate was pressing for closure when he’d already agreed to give Trustee Simon Rodriguez until May 1 to analyze documents in Martino’s estate. Too, Romero questioned why Martino had filed for liquidation under Chapter 7 of the bankruptcy code rather than Chapter 11 reorganization, which allows debtors to essentially control the case.
Martino said he wants Romero to decide which assets can be liquidated and to negate assertions he tried to hide anything. Trustee attorney David Wadsworth bristled at Martino’s efforts to stem publicity of the case, apparently prolonged with each court hearing. “The only benefit (to speeding up the case) is to his public image,” Wadsworth said. “Clearing his name … is not the trustee’s concern. (Martino) wants this case to be a celebrity exception. To make that exception just because he’s Tom Martino is ludicrous.”
Read MoreFormer New York Mets outfielder Lenny Dykstra was sentenced to three years in prison this week after pleading no contest to grand theft auto and providing a false financial statement, ESPN reports. Dykstra was sentenced after the judge refused to allow him to withdraw his plea and said the scam to lease high-end automobiles from dealerships by providing fraudulent information and claiming credit through a phony business showed sophistication and extensive planning. Dykstra initially plead not guilty to 25 counts after police arrested him and found cocaine, Ecstasy, and human growth hormone at his Los Angeles Home last April. Prosecutors said Dykstra and his accountant provided information at two dealerships from a man they claimed was a co-signer but who had not authorized his name to be used. The leases were not approved. Dykstra still faces federal bankruptcy charges and is schedule to stand trial this summer. He filed for bankruptcy a few years ago, claiming he owed more than $31 million and had only $50,000 in assets. Federal prosecutors said that after the filing, Dykstra hid, sold or destroyed more than $400,000 worth of items from the $18.5 million mansion without permission of a bankruptcy trustee.
Read MoreTraining on your terms, when, where and how you want it. Small Business Lenders who want the absolutely best professional instruction for themselves and their staff, use Coleman On Demand for their small business banking training needs. Coleman’s On Demand online training lets you dictate the scope and pace of your learning needs — not the other way around. No need to waste time traveling and incur expenses for off-site instruction. You choose the time and place at YOUR convenience. We only engage the country’s leading small business banking instructors to deliver training modules on the topics you want to know more about, in a clear, concise and professional manner. We choose instructors who satisfy two criteria. 1) They ARE the national expert at what they do, and 2) They know how to teach. Once you sign up for a course, you have unlimited access and unlimited viewing privileges. Immediately. View it as many times as you wish! There is nothing to download to your computer. Everything is accessed online. View from a multitude of devices, your work computer, your home computer, your smart phone or your tablet. You may download the course and listen on your IPod or MP3 player. Read More Here.
Read MoreThis upcoming webcast features a panel discussion on how banks can best achieve their growth objectives in 2012. Hear real-world examples on lessons learned in the recent past and strategies to drive growth in today’s challenging markets.
Discussion topics will include:
• Overview of the credit environment and how it is influenced
by the economy and industry fundamentals
• How to access capital and attract stable deposits
• Why banks need a post Transaction Account Guarantee
(TAG) plan now
• Pairing non-performing asset (NPA) sales with growth
strategies
• NPA expenses and their drag on performance metrics
• Strategies for driving operational improvements and
containing costs
• Using SBA lending programs to increase bank profitability
• Successful, and different, community bank SBA lending
models
Panelists include:
• Keith Leggett
Senior Economist, American Bankers Association
• Joshua Siegel
Managing Principal, StoneCastle Partners
• Jon Winick
President, Clark Street Capital
• Bob Browne
Director, McGladrey & Pullen, LLP
• Bob Coleman
Editor, The Coleman Report
CPE credit available
McGladrey & Pullen, LLP is pleased to offer up to 1 online CPE credits for attending this event. To qualify, you must log in to both the web and teleconference bridges and provide your first name, last name and email address. You will need to be connected for a minimum of 50 minutes with 75% polling question participation per hour to receive full credit.
Click Here to Sign Up!
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With the lack of qualified applicants, small business borrowers may now have the upper-hand at the negotiating table.
According to a story by the Washington Post, if a small business borrower meets a lender’s test, they may hold the upper hand at the negotiating table given the current scarcity of such borrowers.
“Banks now are looking for quality borrowers and they are willing to sacrifice yields to obtain a quality relationship with a good business,” Bill Ridenour, president of John Marshall Bank, said, “So while it pains me to say this, if you have done your homework and you are one of those customers that is currently well qualified to borrow, you should drive a good bargain when negotiating your terms.”
The story says that if you are seeking capital, have a proven track record, a backup plan for repayment, and the moxie to put personal finances on the line, now is perhaps as good a time as ever to shop for a small business loan.
Do You Agree?
Read MoreThe sub-sandwich chain that faced the eleventh hour of bankruptcy has taken another step in it’s process to rebuild. According to FastCasual.com, Quizno’s has announced a partnership with QSR Russia Ltd (QRL), to launch the flagship Quizno’s restaurants in Russia. St. Petersburg will be home to the first several locations to open this year, with more than 20 locations expected by 2014. The partnership is the latest chapter of Quizno’s development initiative to open more than 400 international locations by 2020 in more than 40 regions of the world. Quizno’s and QRL anticipate growth in Russia as the nation prepares for two major world sporting events scheduled in the coming years – the 2014 Winter Olympics and the 2018 World Cup.
Read MoreWe’re taking a break from our usual “Mug-Shot Monday” series to run this Financial Times article about the fact that there was not a single new bank that opened its doors in 2011.
The last time this happened was in 1984.
Two other interesting facts for small business lenders;
· Bank operating revenue decreased for only the second time since 1938
· But, net income rose 40% as reserves for loan losses decreased dramatically.
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Check out our slate of Coleman webinars this month.
“Managing the Loan Broker Relationship,” Tuesday, March 6th with Charles Green
“Underwriting SBA Forms 159 and 912,” Friday, March 16th with John Dunn
“Are you Ready for your 2012 SBA Audit?,” Tuesday, March 27th with Kerri Agee of banc-Serve
“The 504 Pooling Program, Still a Viable Product in 2012,” Tuesday, March 20th with Bob Judge and Jordan Blanchard of Government Loan Solutions
“Dialing for Dollars for the BDO; The Art of the Telephone Cold Call,” April, date to be announced, with Bob Coleman, Chris Hurn and Dan Eshbaugh
Also, check out this free webinar you may be interested in…
“Going for Growth – Beyond the Past, Now to the Future” Thursday, March 22nd
(A free webinar sponsored by American Bankers Association, McGladrey, StoneCastle Partners, Clark Street Capital and Coleman Publishing.)
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Today’s Fraud Friday fraudster has so much against him, it takes up both stories in our newsletter.
Nick Park plead guilty this week to conspiracy to commit bank fraud in connection with a scheme to fraudulently obtain business loans, resulting in losses of at least $1.3 million. According to the 7th Space Interactive, in 2006, Park and a co-defendant brokered a loan on behalf of a buyer interested in purchasing a restaurant in the Washington D.C. area. In order to make it appear that the buyer owned property that could be used as collateral for the loan, Park re-titled a home he owned in the buyer’s name, without the buyer’s knowledge.
In addition, Park and his co-defendant submitted altered copies of the buyer’s bank statements to the bank to fraudulently reflect more money than was actually in the accounts. Prior to the loan closing, the buyer gave Park a cashier’s check for $50,000. Park also instructed the buyer to pay his co-defendant $7,000 for processing the loan. Based on the fraudulent application, the bank approved a SBA-guaranteed loan for $350,000 to finance the purchase of the restaurant.
Park faces a maximum sentence of 30 years in prison for bank fraud conspiracy.
Read MoreFrom 2000 to 2007, Park was also a part-owner of a dry-cleaning business. In 2007, Park approached a co-defendant, who had previously brokered the loan for Park and his partners, about raising capital in connection with the business. The co-defendant advised Park that since on paper the business appeared to be a sole proprietorship, the partners could arrange a shame sale among themselves and obtain a small business loan from the SBA. Park and another partner then formed a new entity and “sold” the business to the remaining partners. To finance the sale, the co-defendant created a fraudulent gift letter reflecting that Park’s wife was making a gift to one of the partners who was purportedly purchasing the business. Park knew that his wife was not making a gift, and that the letter was a fake. Park provided his wife’s bank statements to his co-defendant, who altered the statements to make it appear that Park’s wife had the funds referenced in the fake gift letter. Park knew that his wife did not such funds, and failed to tell his wife about the fake gift letter and altered bank statements. Based on the fraudulent documentation provided to the bank, a $950,000 SBA-guaranteed loan was provided to fund the purchase of the cleaning business. Park received a wire transfer of $467,350 from the loan proceeds, and the remaining proceeds were applied to a debt Park owed a lawyer.
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