The soaring stock market has resulted in a frothy ABL market with competition at an all-time high and liquidations, outside of retail, at a low. Appraisals from the Big Four firms have held up. Charlie Perer looks into his crystal ball to envision the ABL scenario when the next recession hits.
In the past decade, growth in financial technology has spawned a new generation of online lenders. These lenders use the latest technology to underwrite and finance small business loans. Customers can apply online and receive funding in 24 hours in some cases. ABF Journal Editor Nadine Bonner speaks with executives from three fintech companies that specialize in small business loans.
As the aging population continues to grow, there is significant demand for smaller, more “home-like” senior communities that are also more familiar and affordable. The developers, owners and operators of these smaller communities typically face unique challenges obtaining financing, especially from traditional lenders. Adam Sherman explains how specialized lenders create offerings for this niche segment.
Franchising is becoming a popular option for a wide range of businesses. Franchising provides brand recognition for health clubs, bakeries and, of course, restaurants and fast food outlets. As the business model expands, franchisors often require third-party financing. Leonard Vines and Beata Krakus point out the red flags lenders should watch for before agreeing to finance a franchise.
With too much capital chasing too few transactions, the middle market is ripe for change. Charlie Perer predicts an explosion of debt options for non-sponsor backed companies over the next 10 years. He notes that as non-banker lenders offer customers more service and flexibility, banks will respond by consolidating.
Liz and Curtis Chism began by making beer in their kitchen with a brewing kit. Today, they own Council Brewing, a popular San Diego destination for craft beer lovers. As the Chisms honed their brewing skills, they also gained the financial expertise to turn their hobby into a thriving business. Live Oak Bank provided both financing and business acumen to help them make the transition.
In the face of continuing bank regulation, alternative lending companies are launching to fill in the gaps. ABF Journal contributor Hugh Larratt-Smith examines the types of loans these lenders are providing and shows how ABL lenders can benefit by teaming up with these new players.
Brands like Cheerios, Toyota and Coca Cola have become ubiquitous. Once confined to radio, television and print publication ads, they now follow us as we surf the internet, peer out from the margins of our Facebook pages and insinuate themselves into our Twitter feeds. Charlie Perer argues that small lenders need to establish their own brands to compete with the industry giants. A strong brand can set a lender apart from the pack and establish an identity that will resonate with borrowers.
A factoring relationship includes three parties: the factor, the seller and the buyer. Although the buyer’s participation is critical to ensure a smooth transaction, they are usually not consulted or informed about the factoring process. As a result, many companies have a negative view of factoring. Anne MacRae discusses a survey that presents the buyer’s point of view and offers suggestions to repair a rocky relationship.
Many lenders think of credit insurance as an added expense, but Global Commercial Credit’s Victor Sandy outlines the myriad ways borrowers can use it as a financial tool. He discusses the key benefits of the insurance and provides a sample cost benefit analysis.