Who Finances the Financier?

We all know that it is hard for small businesses to get financing these days from banks – it was never a piece of cake, and now that the credit crunch is on for so long we see it has gotten ridiculous.  But… did you ever wonder what a bank does when it needs financing?  Yes, banks need money too!  In fact, banks don’t just give you a hard time when you want a loan because they are unsure if you’ll default — they sometimes just don’t have the money.

Lenders, especially small ones, struggle regularly to find investors.  This is in part because of federal regulations placing restrictions and rules on investors who invest in a lending institution.  Basically, if a private equity fund (or other investment entity) owns 9.9% or more of a bank, then they are required to do special reporting and subject itself to regulatory scrutiny.  Beyond that annoyance, in order to own more than 24.9% of a bank, an entity has to register as a “bank holding company” and must be a “source of strength” for the lending institution.

To say the least, these can be big deterrents to investors considering investing heavily in a bank — when combined with the uncertainty about the future of lending, this makes for a shaky proposition for a bank in search of cash.  If the bank doesn’t have cash, it can’t lend you or your business any either!

It was recently reported in the Wall Street Journal that officials from the Fed have been meeting with various buyout firms to brainstorm issues and solutions which they face when considering investing in a bank.  If they succeed in finding a way to reinterpret /re-legislate the current laws, then more private equity firms may be able to invest in banks.  The real question is: given the current lending crisis, will any one will want to invest, even if the red tape is cut?

If you don’t want to wait to find out and you need cash for your business today, then check out alternative financing options like credit card factoring and business cash advance.

Upcoming Free Webcast on Financing

I just found out about a great webcast which will be taking place on June 24th.

“The American Dreams Rude Awakening- Mortgage Debacle and Foreclosures”

The OU (Orthodox Union), a Jewish organization, is sponsoring a free webcast focusing on how to deal with the mortgage crisis, whether you are looking to get a mortgage, or your house is being threatened with foreclosure. Tune in on June 24th from 6pm – 8pm EDST. Don’t forget to sign up first.

They will be addressing numerous issues including:

  1.  Foreclosure/mortgage issues such as the sub prime crisis and what it means,
  2.  How the crisis was born,
  3.  Modifications which are being made to loans as a result of the crisis,
  4.  Tips on dealing with foreclosure litigation,
  5.  Picking banks vs mortgage brokers – how-to,
  6.  Your credit rating and foreclosure, and
  7.  What can be done with a “re-set” mortgage rate.

The panel of presenters will include a variety of opinions. Including that of a Bank Loan Officer, a Mortgage Planner and an Attorney.

In order to “attend” the webcast you do need to sign up for a mailing list – but you can always cancel later. Check it out, I know I will. I also just saw that without joining you can also watch old webcasts, although those are more job-search/career related. If you miss the webcast live it might just make sense to check out the site after the 25th to watch/listen.

Props to the OU for having such helpful webcasts free to the public!

Finding the Top Business Blogs

I’ve spent the last week compiling info on the top business blogs – by golly there are a lot out there. So far, I have been taking John Crickett’s Top 100 Internet Business Blog list from his Business Opportunities and Ideas blog, and finding out key info on each blog and compiling it.

John’s list is based on the Alexa ratings. Most of the blogs listed there are focused on Online Marketing. I’d also like to add more business blogs with more general advice on running a business, or on other areas of business (such as financing) – perhaps some blogs similar to FastUpFront. Is your favorite business blog missing from the list? Let me know so I can add it to mine. I also plan to send John my detailed list so he has more specifics on the sites on his list.

Look for the completed list near the end of the week, or early next week. (It takes a long time to go to every site and see who writes it, what it is about, etc and then to write it all out!!  I’m a quarter done now.)