Finance Professionals Offer Simple Advice to Borrowers

Getting money into the hands of business people was among the topics discussed by finance professionals at the Business Forecast Conference put on Oct. 28 by the Valley Industry & Commerce Association. Advice from panelists, who spoke about the theme “The Pursuit of Capital,” was simple yet poignant. First and foremost, business owners who want to borrow money from a bank or lending institution should be specific about the amount and purpose of the loan. Positive cash flow and good credit rating is a good place to start, but it’s even better to explain how the money will be used whether it’s for an equipment purchase or fixing up a building. Borrowers should think like bankers and plan a communication strategy before asking for any money. Another bit of advice: talk to a lot of banks when pursuing a loan. Dennis Santiago, chief executive officer of Institutional Risk Analysis, said when business people tell him about their struggles to get a loan, he often learns that they only approached one or two banks. If you are not approaching at least five banks you are not doing your job, Santiago said. “You need to get out there,” he added. “You need to explore which banks have the products that are suited for you.” US Bank rates every business that comes looking for a loan on a scale of one to nine based on risk, said Daniel Lykken, senior vice president for commercial banking in Encino. The bank bases the rating on cash flow, the amount of cash available and the amount of debt the business has, Lykken said. Collateral, on the other hand, was not much of a determinant in who gets a loan, but merely a measurement of the bank’s loss in the event of default, he said. “If we make a successful loan, we can make another one after that,” Lykken said. Industries currently receiving capital are technology, some manufacturing, and health care, the panelists said. As the country pulls out of the recession, the businesses doing the best are those that align their expenses with their revenue so their need for working capital is lower, Lykken said. As the discussion drew to a close, panel moderator, Assemblyman Felipe Fuentes, wasn’t letting the panel members go without getting a statement on what they thought of the current anti-banking sentiment among the public and if the Occupy Wall Street protesters in New York City and elsewhere had reasonable demands. Troy Bosch, of Bank of America, and Euhoe Park, a lending specialist with the Small Business Administration, had little to say on the topic other than that the protests would have little impact on business lending. So it was up to Santiago, who doesn’t work for a lender but instead analyzes their financial performance, to give the most thoughtful response. The anger toward banks comes from a feeling of betrayal which is why there have been calls for substantial changes in how banks operate, Santiago said. The movement’s call to have all debt forgiven, however, was not something that was workable, Santiago said. “The fact that you have protests is not a bad thing but they have little to do with the solutions that will take place,” Santiago said. New Chase Office Chase opened a new private client office in Sherman Oaks to serve affluent families and individuals. The office combines the customized banking services of Chase with the tailored investment services provided by J.P. Morgan Private Client advisors. “Chase Private Client is a recognition and response to the evolving needs of our affluent Chase customers,” said Chase Wealth Management CEO Barry Sommers, in a prepared statement. “As our customers’ lives get more complex, we aim to provide them with the products and services they want and need to effectively manage their wealth.” The Sherman Oaks office, 13949 Ventura Blvd., is just one of three opening in the greater Valley area. Offices in Encino and Westlake Village opened on Nov. 1. Chase Private Bank plans to have 250 locations and add another 500 locations nationally by the end of this year. Calabasas Capital Hire Andre Stokes has joined Calabasas Capital LLC as managing director. Stokes brings 15 years of experience in investment banking, business strategy and corporate development to the firm, which serves lower middle market privately held companies. Stokes had advised clients on leveraged buyouts, minority investments, recapitalizations, and IPOs. In a prepared statement, Stokes said he looked forward to growing the presence of Calabasas Capital in the marketplace. “The firm’s track record of success working with closely-held businesses, its network of capital markets providers and its ability to execute on all types of transactions allows us to objectively advise our clients,” Stokes said. Prior to joining Calabasas Capital, Stokes worked at Credit Suisse in New York and Bear Stearns in New York and London. He is a founder of Ophidian Advisors, a financial advisory and consulting firm. Accounting Firm Honored Holthouse Carlin & Van Trigt was recognized as a “Best of the Best” accounting firm by the trade publication, Inside Public Accounting. Additionally, Holthouse was named to the publication’s “Fastest Growing Best of the Best” list. The firm had $63.7 million in revenues in 2010. Holthouse Carlin & Van Trigt is headquartered in Los Angeles and has offices in Encino, Westlake Village and Camarillo. Phil Holthouse, managing partner of the firm, attributes its success to focusing on client service, training, quality control and ongoing improvement through best practices. “Our multi-office business model allows the firm to attract and retain top-quality clients, partners and staff throughout the Southern California region while delivering high-value tax, accounting and consulting services to a variety of industries and high-net-worth individuals,” Holthouse said in a prepared statement. Staff Reporter Mark Madler can be reached at (818) 316-3126 or by e-mail at [email protected]