Gilmore Bank Mixer 10-14-10

Some interesting nuggets came from the Gilmore Bank Mixer held at their branch location at the Grove/Farmer’s Market in Los Angeles.  Number one, for those of you who don’t know, Gilmore banks owns the Real Estate that the Grove is developed upon.  It is on a long term land lease to Rick Caruso’s company.  Number two, Jim Roby and Cyrus Greene, both Gilmore associates involved in commercial lending, noted that of the applicants that they are reviewing for SBA loans, they have noticed an increase in 2010 revenues and profits over 2009 figures.  Of course, this doesn’t mean all companies are experiencing a better 2010 over 2009, just that struggling companies may not bother to even apply for a virtually guaranteed no.  Here is the one nugget to really take away from this, when it comes to underwriting a loan, the banks are very concerned with the future prognostication of a particular business.  So in 2009, when businesses  were experiencing downturns in their revenue and profits compared to prior years, the banks were wondering how long the revenue and profit declines were going to continue.  For those businesses that are even ever so slightly up in 2010 compared to 2009, they are showing a positive revenue trend, even if it was tiny.  See, a negative trend gets extrapolated to zero, while a positive trend doesn’t.  So, if you are business is up this  year compared to last, then you can possibly consider a commercial loan for acquisitions or equipment financing.