When commercial borrowers are evaluating how to solve their current financial problems, the possibility that they might benefit from specialized small business communications help rarely jumps to the top of their action list. The failure of small business owners to devote sufficient attention to areas such as commercial lender negotiations and business bank communications almost always ends up being a critical mistake that is realized and regretted later. This unfortunate and avoidable scenario is recently being witnessed with even more frequency for a number of reasons.
First and foremost is the increasing confusion and uncertainly that prevails throughout the commercial finance lending community. Banks are simply not making small business loans and commercial mortgages at a rate that will sustain normal working capital needs for small businesses. Bank failures are at a historically high level, and even more banks are defined as having serious operating deficiencies by the Federal Deposit Insurance Corporation. The biggest banks seem preoccupied by crisis management involving foreclosures, derivatives and exposure to several new risk areas because of their adventurous investment practices. Many of these lenders are devoting more financial resources to their political lobbying activities than they are to small business finance programs.
Perhaps this is not so surprising after all because of the high profit margins that credit cards have generated for the bankers over a long period of time, and recent government legislation has finally reduced or eliminated some of the easy money for them. It is hard to sympathize with any bank complaints that refer to how difficult it will be to replace revenue sources like credit card processing which routinely gives them a rate of return between fifteen and thirty per cent. Most observers consider these lofty rates to qualify for predatory lending treatment, but the typical bank interpretation has so far been to look for other ways to replicate the quick and easy and immediately profitable revenue streams.
While it should be needless to say, it really must be said repeatedly until it is fully realized that small business financing does not meet an artificial commercial bank lending standard to produce a profit margin of over twenty per cent. In the absence of meeting this test, banks seem to have established a rainy day fund for themselves by reducing traditional lending activity and laying off thousands of their employees while simultaneously increasing executive compensation even though they continue to be scrutinized for acts of both omission and commission during the past several years. In the most recent outrageous example of banking institutions placing their interest well ahead of their customers, a financial holding company run by a former governor and senator has declared bankruptcy while simultaneously noting that over a billion dollars of client funds cannot be located.
A second major reason for small businesses not seeking small business communications help in a timely manner is related to their own internal limitations rather than the external complications involving banks and other commercial lenders. It is an unfortunate reality that small business owners frequently have an excessive number of important activities simultaneously competing for their attention. In the absence of more time or money (or both of these finite resources), some high priority action items will end up as unfinished or not even attempted.
The bleak picture portrayed in this discussion was previously described as avoidable. Despite the concerns and potential problems noted above, there are practical business solutions for small businesses interested in exploring their options further. The chaos which prevails in the world of commercial banks can be managed and facilitated by business bank consulting and business lender negotiating as well as commercial lender communications that fall outside of the need for specialized negotiation strategies. Internal business limitations can often be minimized sufficiently through the prudent use of commercial finance consulting and small business communications consultants. However even with successful use of external professional help, it is likely that any realistic solution will still involve a meaningful amount of time and effort by each small business owner.
