SBA

Caterpillar Sales in Free Fall

By Ravinder Kapur

Caterpillar’s heavy machinery sales to the mining, construction and energy industries have declined for the 36th consecutive month, a reflection of the economic slowdown in China and impact of falling global commodity prices.  Worldwide, the number of machines that the company sold in October fell by 16% compared to the same month in the prior year. The steepest reduction in sales was in Latin America (36%), followed by Asia/Pacific (28%), Europe, Africa and Middle East (13%) and North America (8%).

Mining.com reports that sales are down more than $15 billion from their peak four years Caterpillar Inc.ago. Revenues in 2015 are expected to fall for the third year in a row to $48 billion and then decline further in 2016 to a level of $45.6 billion.

In September Caterpillar, the world’s biggest construction and mining equipment maker, had announced that it would cut as many as 10,000 jobs through 2018. Of these layoffs, 4,000 to 5,000 would be made by 2016, most of them coming in 2015. The company’s workforce has already been slashed by 31,000 since mid-2012.

Caterpillar Chairman and chief executive officer, Doug Oberhelman said, “Managing through cyclicality has been critical to Caterpillar’s success for the past 90 years; it’s nothing new for us or our customers. When world growth improves, the key industries we serve – construction, mining, energy and rail – will be needed to support that growth. We’re confident in the long-term success of the industries we’re in, and together with our customers, we’ll weather today’s challenging market conditions.”

Why should commercial lenders care about Cats?

Caterpillar is a mammoth manufacturing company, well known for their ‘yellow equipment,’ a reference to the brightly painted implements and tractors they sell that became a colloquial reference for commercial lenders for heavy earth-moving equipment of all brands. The company has been followed as a part of the 30 firms comprising the Dow Jones Industrial Average since 1991.

Given the nature of their business, when sales of heavy equipment slows, it reflects that other economic activity has begun to slow, such as mining, construction, road construction, shipping, etc. Thinking about 36 months of continuing sales declines is a good metric pointing to a nearing recession.

China is a key market for Caterpillar and the reduced demand for machines there has had a great effect on the company’s consolidated volumes. As reported by the Financial Times, Tom Pellette, group president of construction and industry equipment said that industry-wide sales of hydraulic excavators with a capacity of 10-90 tons would be in the range of 23,000 in China this year. In comparison, sales in March 2011 alone were 27,000 and more than 112,000 units were sold in 2010, the year with the greatest offtake.

The simultaneous slowdown in key geographical markets coupled with the crash in commodity prices has resulted in a steep fall in orders for Caterpillar. Despite the continuous decline in sales for the last three years, the company is still financially strong. It has paid a quarterly dividend every quarter since 1933 and has increased annual dividend every year for over 20 years. When the downturn ends, Caterpillar is well-positioned to capitalize on the situation – it has improved its machine market position every year since 2010.

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This Year Give a Gift With Mutual Benefits

By Charles H. Green

Get ready for the bank’s break room to be overrun with cookies, cakes, and nuts–it’s time for the holiday treats to begin. Just remembering the onslaught of all those foods and sweets arriving annually around the office from well-meaning vendors,  bank clients, and even colleagues still gives me a sugar high.

Surely, many bankers will return the favor for some clients or team members, with the Gift boxusual bottle of wine, fruit basket, or sleeve of golf balls to express holiday cheer and get their annual message across. But you must know, much of the expense–and therefore the impact–of these efforts are a waste of money and opportunity.

Instead of expanding the recipient’s waistline or garbage bin, why not give them something they really need: some help managing their business. Whether your job is managing clients or a stable of commercial lenders, there’s a mutual benefit to be gained by investing your gift in something that can improve the prospects of the other party.

For colleagues

They say charity begins at home, and if you’re struggling to get ahead in your lending team or have a colleague new to the business, consider the gift of tutorial. SBFI offers commercial lender training on streaming video for a variety of topics and experiences. Offering the chance of ‘upping the game’ with intermediate topics, or ‘moving ahead’ with senior /leadership topics, all training videos are available (and priced) for individual or group licensing here.


Special Holiday Offer: Get 25% off any course at this page thru December 31.


Or, give your team a book–make their holiday reading something that will continue building their career in the new year, leading to better performance and earnings. Our ‘Financials-Bookstore’ offers several categories of commercial lending topics to challenge everyone, from the newest to most experienced lending in the shop.

For clients

Many of your clients are not necessarily ‘borrowing’ clients, because they don’t qualify for loans yet. Their business is not getting along well enough to be approved by your standards. Instead of another knick-knack, do something different this year by giving those clients a gift that can improve their business management skills and in the process might actually improve your business next year: Give them the gift of insight.

My book Get Financing Now (2012, McGraw-Hill) offers plenty of advice about of the typical kinds of financing businesses use, where to find it, and how to approach the appropriate lender to get it. It also offers plenty of tutorials around the importance of financial statements, application requirements and steps to organize a loan application–which would be helpful to borrowing clients as well.

Likewise, my The SBA Loan Book, 3rd Edition (2011, Adams Media) offers insight for clients seeking SBA-assisted financing. While some of the program details are a little dated, the ‘blocking & tackling’ of organizing information and getting their numbers in order is still on the money to help clients help you get successful loan applications assembled.

Business writer Ty Kiisel’s book, Getting A Business Loan – Financing Your Main Street Business (2013, Apress) offers some common sense advice for small business owners and is full of tips to help them figure out necessary steps to getting funded.

These are but three of the several titles found on the ‘Borrower Resources’ page at Financials-Bookstore, a curated list of recommended financial books offered by Amazon.com. Check them out and consider giving your clients the gift of better operating results, improved financing and higher profits.

And don’t forget to share these gift ideas with others on your lending team.

For the money you may have spent last year on boxes of stale cookies or a few dozen golf balls, you could put video training or books into the hands of people–your colleagues and clients–that need better business management more than extra calories.

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Small Manifesto About Small Business

By Charles H. Green

This week is the one when we celebrate our abundance, and tomorrow the nation hopefully recognizes the fifth annual ‘Small Business Saturday’ in a robust sort of way, led by legions of shoppers invading mom & pop stores with Amex cards in hand. I’m weighing in to support that effort with my own ‘small manifesto about small business’ as a reminder to small business lenders why our work is so important.

First of all, as is similar to politics, all business is small. Sure, I know that much commerce Support Small Business Year Roundends up fairly large, like purchasing a new Boeing 737 priced between $51- $87 million. But while it’s hard to imagine that number as ‘small,’ remember that it’s comprised of hundreds of millions of small business transactions, from the finite number of nuts and bolts machined,  windows and seats manufactured, and the transportation of these many parts to the hundreds of distribution warehouses, assembly plants and hangers spread across 50 states to produce these aircraft.

It’s natural that my career was spent working with small business owners in that I grew up in a household that owned one. Our evening meal often doubled as a ‘board’ meeting of a small town dry cleaning business. The gravy was passed over discussions about customer service issues (“the customer is always right!”), the rising cost of supplies (particularly during ‘70s oil embargo) and the weekly payroll. My parents took great pride in paying their longest-serving employee +$.10 over the $2.20 minimum wage.

Tribute to Main Street

Today the face of small business has changed dramatically. In that small hamlet of Piedmont AL where I grew up, the roughly 9-block town center formerly contained a Ben Franklin Five & Dime store, Western Auto, Rexall Pharmacy, and Kwik Chek grocery. All of these recognizable names had multiple local competitors and were served by two single-location, locally-owned banks. Those store brands are practically extinct today, when compared to their former prevalence across the fruited plains.

Why? Big box stores for the most part. Scaling the delivery of goods/services first gave us the ‘supermarket’ to compete with those idyllic small 1,000 s.f. Main Street grocers, convenience stores in place of the 3-pump gas station, and the reduction of pharmacists from a genuine apothecary to a licensed pill salesperson representing third-party insurance companies. Franchise retail companies like Dollar General and Dick’s Sporting Goods swapped small town entrepreneurship for a crack at national co-op advertising.

WalMart, Home Depot, Walgreens and Target are generally well-stocked, competitively priced, and nearby, but murdered tens of thousands of small, Main Street businesses in their rise to become household names that fiercely compete to sell us largely the same things. Yes, you can find dishwashing soap and light bulbs in all four stores.

And recognize that my thinking is more than mere sentimentality over the loss of a five-stool soda fountain at Purdy’s Pharmacy, the smell of fresh apples at the door of Harbin Morgan’s Grocery, or a walkable business district where you could find most of everything you needed within a half-block of your car.

What’s really lost from those days on Main Street is what the big business cannot scale or deliver: good customer service, relative convenience, and the unique, intimate experience of a smaller retailer. When shopping in a smaller store owned by a sole proprietor, it’s hard to be ignored when trying to find something, with the owner often serving as the salesperson helping you. Sure, there’s sometimes the irritation of being overly-attended to, but that’s not nearly as frustrating as wandering around a megastore without finding a store employee to take your money when trying to buy something.

Nothing is constant, except change

Pulling up to a parking space 30-feet from the store’s entrance sure beats circling two levels of a parking deck ahead of a 300-yard walk into a mall where you need a map to find where you’re going. Inside a smaller store, customers can find a unique selection of goods that were curated by the owner’s hand-picked choices at a regional merchandise mart. In big stores, you wander through a replica of the same big store you probably visited elsewhere, with the exact displays, fragrances and hard-to-find salesperson as in their other 3,000 stores.

Scaling retail companies extracted profits out of Main Street and gave them to distant shareholders and pension funds. Worse, the resulting big box jobs–of which fewer survived than originally on Main Street–shaved salaries, benefits and customer care out of thousands of cities, and put many folks on public assistance. National retailers answer to Wall Street rather than customers, which is ironic since you have to work so hard to find someone to pay.

Supermarket? Call me old-fashioned, but I would actually welcome a return to the days when I didn’t have 300 soft drink choices on one 200-foot aisle, and maybe had to go to a second store for that unique ginger beer that calms my bourbon. Who needs 25 brands of yogurt or so many temptations on the checkout lane?

I know–there’s no going back and you can’t rewrite history, but of course Sam’s Club and CVS are also not the end of the story. Technology and the internet have begun changing retailing in interesting ways ever since Amazon.com went live. Small Main Street businesses can offer their unique goods through online portals if they want to, and actually compete with marketing that’s accessible to all.

So, what to do?

Yelp! and TripAdvisor offer a path for small, locally-owned restaurants, lodges and retailers to compete with the big boys head-to-head, particularly in smaller markets. Example, I spent a recent weekend in Dublin GA, where highest-ranking restaurant was the Southern Heritage BBQ, beating out better known, national franchises like Applebee’s, Red Lobster and Longhorn Steakhouse.

Other online malls like Etsy’s and Ebay offer retailers of any size a platform on which to compete globally, and particularly offers vendors of unique items the chance to elbow their way into competing with any other merchandiser, regardless of size. While these portals won’t turnaround the fortunes of those gone on before, they provide a glimmer of hope to the future of the small fry.

Have you visited a mall lately? The real estate industry is beginning to feel the impact of internet shopping, with the reliability of ‘black Friday’ becoming more tenuous, and not helped by global terrorism concerns. Watch for retail malls and shopping centers to diversify tenant mix, as shoppers slow down their annual invasion. Already the push-back against our consumption-oriented culture is starting to appear, as dozens of big retailers were loudly advertising this year that they would not be open on Thanksgiving.

What can you do? As a consumer, make an effort to buy local–shop small–patronize the business owners that you provide loans to, that your children go to school with, and with whom you form a community. If it costs a few more cents for that bottle of shampoo or carton of eggs, rack it up to the cost of a vibrant Main Street and remember you’re saving gasoline and time not having to drive across town and hike across acres of stuff in the outlying WalMart.

As commercial lenders, think seriously about the impact and importance of small companies in your market, and give them the benefit of the ‘stretch.’ You can’t bend credit rules, but you can support them with your patronage, mentorship, and maybe a lower financing cost, like you would use to accommodate a national-sized borrower.

America was born of and raised on small, local-owned businesses, and it still accounts for a majority of GDP and employment. Let’s keep it that way by including them in our own personal and business supply chain as we prosper.

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Government Regulations Foster Healthy Business Competition

By Ravinder Kapur

Most businesspeople are honest, but many are not, a fact that gives rise to the necessity for government regulations that curb dishonest, and in some cases, criminal behavior by corporate types. But there is a significant section of political theory and opinion that holds all government interference in business as unwarranted.

While unethical and even fraudulent actions by corporates are regularly unearthed, a few Financial Regulationcases in the recent past illustrate the need for more, not less, regulation. Volkswagen’s practice of installing software that fudges emission data in its diesel cars is shocking for the scale on which the fraud was perpetrated. Although the CEO of the company has subsequently resigned, it is still not clear how a deception of this nature could remain secret for so long.

Paul Krugman’s recent article in the New York Times describes how certain sections of the for-profit education industry are cheating students who take on massive loans only to discover that their degrees are worthless. As a result of investigations carried out by the U.S. Department of Education, Corinthian College closed a number of its campuses.

DeVry University and Kaplan College have also undergone closures and sales after experiencing declining enrollment and regulatory attention from the Consumer Financial Protection Board, state attorney generals, and the U.S. Department of Education.

The Federal District Court jury in Albany has convicted the former president of a peanut company and sentenced him to 28 years in prison for his role in a salmonella outbreak that killed nine people and made another 700 sick. The prosecutors said that Peanut Corporation of America repeatedly sold contaminated peanut products and misled customers about test results.

Another case that attracted media attention was the acquisition by Turing Pharmaceuticals of the right to a drug used to treat parasitic infections. The company increased the price of each tablet from $13.50 to $750 because of its desire to maximize profits.

Those who maintain that minimal or zero government regulation is required are making a specious argument. The idea that reduced government interference makes for increased business innovation and competition is appealing on a base level, but frankly, misleading.

If the government does not provide adequate checks, consumers are often subjected to unethical, or even dangerous behavior by companies. In fact, those businesses who follow the rules would suffer the most as they would be at a competitive disadvantage compared to corporation that flout regulations with impunity.

While a substantive–and accurate–case can be made for the drag on economic output that’s caused by regulatory compliance and the cost of administering it, overlooked is the cost of the absence of oversight to prevent fraud and uneven competition, along with the system of laws to hold violators accountable. And it bears reminding many that our federal government was essentially formed to regulate business in the first place.

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Mergers Reduce Competition, Increase Prices for Consumers

By Ravinder Kapur

When Whirlpool acquired Maytag in 2006, the merged company controlled three-quarters of the market for some home appliances. Similarly, when the wireless phone industry consolidated from six national companies to four, the two largest, Verizon and AT&T, built up their subscriber base, and now together account for 70% of all subscribers.

A New York Times article cites a recent paper by two economists, Jason Furman and Peter MergeOrszag, that says that consolidation of companies might have led to some firms earning “super-normal returns” that are ten times as large as the median returns. As a result, this has exacerbated income inequalities by giving the executives and shareholders of these companies greater income.

After mergers in the airline industry between United and Continental, and American and US Airways, domestic passenger traffic is dominated by four airlines, down from six a few years ago. This has had a direct impact on competition and fares and is the subject of an ongoing investigation by the Justice Department.

As firms gain market dominance they are able to raise prices without fear of losing customers. A Wall Street Journal analysis of competitive data from the University of Southern California shows that in almost a third of industries, U.S. companies competed in concentrated markets in 2013. In 1996, the number of industries facing this situation was only about 25%.

In an attempt to promote competition and lower prices for consumers, the Justice Department has played an active role. Its antitrust division and the Federal Communications Commission stopped Comcast from acquiring Time Warner Cable. The Justice Department was also successful in preventing AT&T from buying T-Mobile.

As the number of companies in an industry decrease, the large size of the remaining firms is a deterrent for new entrants. According to the Census Bureau, the rate at which new businesses are being set up has been in decline since the 1970s. In 1977, the growth rate was 17.1%, a figure that had fallen to 10.2% by 2013.

The Justice Department’s antitrust division has been successful in preventing several mergers of large companies that would have resulted in reduced competition. It will continue to play an important role in finding the right balance between allowing companies to achieve the economies that result from an increase in size, and the need to ensure that consumers do not suffer in the process.

Obviously this same kind of concentration has been developing in the banking sector post-Great Recession, as a few of the nation’s largest financial institutions were consolidated or merged, and the results mean that the twenty largest banks control an outsized portion of the nation’s deposits.

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Congress to Blame for Slow Economic Recovery, says Bernanke

By Ravinder Kapur

In his explanation of the story, Ben S. Bernanke laid the blame for the country’s weak economic recovery after the 2008 financial crisis on Congress, saying he felt ‘frustrated’ when he saw that fiscal policy makers seemed to be actively working to hinder the economy.

Bernanke says that many politicians were friendly with him when he met them privately, Ben Bernanke, Courage to Actbut hostile at public forums. He holds Congress responsible for damaging the economy and especially the harm that was caused by the 2013 government shutdown.

A New York Times article about Ben Bernanke’s memoir, “The Courage to Act: A Memoir of a Crisis and Its Aftermath,” states that he acknowledges that the Fed also could have done more at the time of the crisis.

Bernanke says that not lowering rates in September 2008, when Lehman Brothers collapsed was a mistake. But this error was soon rectified, when the Fed’s benchmark rate, which was then at 2%, was reduced to nearly zero by the end of the year.

As chairman of the Federal Reserve for eight years up until January 2014, Ben Bernanke successfully steered the economy out of its worst crisis by injecting trillions of dollars into the financial system. But in a previous role at the Fed in the early 2000s, when he was not chairman, Bernanke was a member of the Fed committee responsible for consumer protection.

At that time, the committee did not impose strict regulations on mortgage lending as they expected borrowers to protect themselves. In his book Bernanke writes, “like flammable pajamas, some products should just be kept out of the marketplace.”

Referring to the Fed’s role in getting the economy out of the recession, Bernanke’s book begins, “In all crises, there are those who act and those who fear to act.” It also seems to be an allusion to Congress inaction, as elsewhere Bernanke says, “I often said that monetary policy was not a panacea – we needed Congress to do its part. After the crisis calmed, that help was not forthcoming.”

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Shaheen Presses Senate for Vote on CREED Act

By Charles H. Green

Senator Jeanne Shaheen (D-NH) took to the Senate floor last week to press for passage of the Commercial Real Estate and Economic Development (CREED) Act, a bill in Congress that would specifically revive the U.S. Small Business Administration’s 504 Loan Refinancing Program. The target of the Senator’s speech was a single unnamed senator that Shaheen said was holding up consideration, and in effect, is denying small businesses access to affordable capital.

The unnamed senator put a ‘hold’ on the CREED Act, an arcane standing rule of the Sen. Jeanne Shaheen D-NHSenate that permits a single member to hold up legislation from being taken up on the Senate’s calendar. It’s generally used sparingly, since it can be used for retribution just as easily.

The CREED Act was introduced by Shaheen and Sen. Johnny Isakson (R-GA) in the Spring, and is also pending on the House side of Congress, where it has not been brought up yet before the House Small Business Committee. It would reinstate the SBA’s 504 Refi program, which expired in September 2012. The program was part of the federal government’s economic stimulus during the Great Recession.


Does your bank sell SBA 7(a) or 504 first mortgage loans into the secondary market? Please complete SBFI/Government Loan Solution’s annual secondary market survey here.


The program allowed small businesses to refinance existing qualified commercial real estate debt, which usually helped small business owners lower monthly mortgage payments with longer repayment amortization.

“There are many strong and differing opinions in the Senate, but when it comes to providing our nation’s small businesses with affordable financing, we’ve found significant common ground,” said Shaheen. “This legislation is an opportunity to address one of the biggest challenges facing small businesses – getting access to credit so they can live up to their full potential. There is small business demand for this program and both sides of the aisle agree that this is a commonsense proposal. The one objection to this legislation comes at the expense of small business growth and job creation.”

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October Jobs Growth “Seals the Deal” for Rate Hike

By Charles H. Green

“Barring any setback in the domestic stock market, the October jobs report almost seals the deal for a December hike,” according to the Director the Economic Forecasting Center at Georgia State University, presented to an audience gathered for the fourth quarter economic forecast presented by the Robinson College of Business. Rajeev Dhawan’s discussion centered on the the first Federal Reserve rate hike since June 2006, which is highly likely to occur in December provided certain conditions prevail.

Although the flagging Chinese stock market in June and the subsequent correction in Dollar Signsglobal markets led to a rate hike delay, the spectacular October rebound of the U.S. stock market led to a hasty change in tone by the Federal Reserve. According to Dhawan, “the performance of the domestic stock market ultimately will determine how aggressively the Fed will move in the coming years.”

“Rate hikes are intended to slow, not stall, the economy,” Dhawan said. “With a potential GDP growth rate of 2.0%, there is little margin for error.”

The forecaster expects 2.4% GDP growth in 2015 and slightly better 2.6% growth in 2016 despite the anticipated December rate hike and a second hike he expects in March 2016. Due to the small margin of error, combined with presidential election brouhaha, the Fed will not hike rates again until post-election.

“How aggressive the Fed is and how high it will go depends on private fixed investment performance in coming quarters,” Dhawan said. He expects “decent” investment growth of 5-6% in 2016, buoyed by strong tech investment. He noted that Congressional resolution of the debt ceiling and budget has relaxed corporate angst about D.C. politics which will aid investment growth.

“Tech investment today results in jobs tomorrow and that is exactly what the Fed will watch in the quarters after its first hike to see how the economy is responding.”

Another benefit of rate hikes, Dhawan said, “is that they bring fence-sitting, first-time home buyers into the market.” Thus, he expects housing starts to rise to 1.287 million units by 2017.

Other highlights from the Economic Forecasting Center’s National Report:

  • Real GDP is expected to grow 2.7% in the fourth quarter, after growing only 1.5% in the third quarter of 2015; leading to an annual rate of 2.4%. Dhawan predicts it will expand at 2.6% in 2016 and 2.4% in 2017.
  • Business investment will grow by 3.2% in 2015, rebound to 5.2% in 2016 and 4.4% in 2017. Expect jobs to grow by a monthly rate of 214,000 in 2015, 182,000 in 2016 and 155,000 in 2017.
  • Housing starts will average 1.112 million units in 2015, rise to 1.212 in 2016 and 1.287 in 2017. Expect auto sales of 17.3 million units in 2015, 17.0 in 2016 and 16.5 in 2017.
  • The 10-year bond rate will rise to 2.32% in 2015 and should rise to 3.57% before the end of 2017.

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ISM Manufacturing Index Falls for Fourth Consecutive Month

By Ravinder Kapur

The October PMI composite index for manufacturing declined to a level of 50.1 as a result of subdued demand from the energy sector and the strong dollar. Meanwhile, the New Orders Index rose by 2.8 to a level of 52.9 and the production index gained 1.1 to also reach a level of 52.9.

The Institute of Supply Management’s Report on Business says that of 18 manufacturing ISMindustries, seven increased business volumes while nine reported a decline. The principal sectors reporting growth were printing, furniture and food, with apparel, leather, primary metals and petroleum and coal products showing contraction.

According to Robert A. Dye, chief economist for Comerica, based on the ISM data, the employment sub-index decreased to 47.6, a statistic that is also reflected in declining payroll employment reported for manufacturing industries over August and September.

In September, the construction sector showed a 14.1% increase over the last year due to growth in the number of multi-family projects. Private residential construction spending reported an increase of 1.9% while multi-family grew by 4.9% for the month.

The Manufacturing ISM Report on Business has been published monthly since 1931, except for a four-year interruption during World War II. The PMI, a composite index combines data on new orders, production, employment, and supplier deliveries.

Although the PMI has declined for the last four months, its current level of 50.1 still indicates growth. A PMI above 43.1 reflects an expansion of the economy with the October PMI signaling growth for the 77th consecutive month in the overall economy and for the 34th consecutive month for the manufacturing sector as a whole.

Why should commercial lenders care?

Bradley J. Holcomb, chair of the Institute for Supply Management Manufacturing Business Survey Committee says, “The past relationship between the PMI and the overall economy indicates that the average PMI for January through October (52%) corresponds to a 2.8% increase in real gross domestic product on an annualized basis.

“In addition, if the PMI for October (50.1%) is annualized, it corresponds to a 2.2% increase in GDP annually,” he stated.

Manufacturing volumes and employment are hard statistics reflecting fundamental economic performance. If goods aren’t produced, they can’t be sold. These manufacturing industries react to real or perceived demand for the goods–or lack of demand–so when they produce, it’s with the idea that there is either a hard order or expectation of one.

Lenders can track this data a one of the leading indicators of growth or lack of it, and set there own expectations for managing balance sheets and the demands of their clients, many of whom may directly interface with the manufacturing sector.

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What Does 2016 Hold for the SBA Secondary Market?

By Charles H. Green

Each year banks, CDCs, credit unions, specialized lenders and thousands of service providers play a vital role with the SBA to help thousands of small businesses start and grow across the country. Loans to finance buildings, equipment and working capital help to create jobs and fund business activity that drives the American economy.

Most of these participating lenders are small community banks or privately owned U.S. Small Business Administration loan programslending companies that stay double busy running their own business at the same time. A key feature of the SBA 7(a) loan program for many lenders is that liquidity is available by selling the guaranteed portion of 7(a) loans in a robust secondary market to provide flexibility to their balance sheet and simultaneously generate non-interest revenue.

For the third year, Small Business Finance Institute and Government Loan Solutions want to gauge the 2016 outlook among SBA managers, business developers,  underwriters, service providers and other vital participants in the secondary loan sales market. The survey covers both 7(a) guaranteed loan sales and 504 first mortgage loan sales.

Would you help?

Please click on this link or below to complete a brief survey to help us understand how your bank used the secondary market last year, the importance of loan sales to your organization and your expectations for selling SBA loans in FY 2016, from the perspective of the important role you play.

All respondents will be entered into a drawing for a $100 Amazon Gift Card in appreciation of your insight and participation.  Feel free to forward this message on to others in your organization or market with an opinion about this important market.

To complete the 2016 SBA secondary market survey click here.

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