Commercial Finance

AEX publishes commentaries about commercial finance funding strategies in a variety of formats. Some are issued as special reports or articles while others are announced via press releases. We often include these observations in The Working Capital Journal (which is updated regularly by AEX Commercial Financing Group). Excerpts from some of our recent business finance funding assessments are summarized below. Please do not hesitate to contact Stephen Bush (AEX's Chief Executive Officer) for more details or clarification of any comments.

In making business financing decisions, it is becoming increasingly important for business owners to identify their most practical alternatives as quickly as possible. In today’s challenging financial climate this will not be an easy task, and there are harsh realities to be confronted by most businesses when candidly evaluating their realistic options for commercial funding. A key element in this process will be to locate a business finance expert (like AEX Commercial Financing Group and a few others) that can provide timely help and honest advice.

Business Finance Funding Using Business Cash Advances

Business cash advance programs which provide cash based on projected future credit card processing are one of the most effective commercial funding strategies we have seen during the recent financial chaos. We have published a practical overview of this successful working capital financing approach — please refer to either the Working Capital Advances page on this website or Summary: Business Cash Advances in The Working Capital Journal. Key problems which should be avoided with credit card financing are highlighted in the summary. AEX Commercial Financing Group has eliminated all of these problems from their Merchant Cash Advance Program.

Please also see the "Business Finance Changes" page for some additional comments about NEW programs for working capital management. In most cases, the new commercial funding options are somewhat better and cheaper (and also more flexible) than merchant cash advance programs. Please contact us directly for a candid discussion about these various alternatives.

FOR EXAMPLE — One new short-term commercial loan program available through AEX is designed for business borrowers needing a working capital loan from $25,000 (smaller amounts also possible) to $100,000 for up to one year.

AEX was helping with commercial finance funding difficulties well before the current financial crisis was recognized by most lenders and commercial borrowers. If anything, we are now increasing our efforts to assist small business owners with the growing challenges involved when seeking new commercial loans or refinancing existing working capital loans. AEX Commercial Financing Group is committed to helping in any way that we can as these challenges evolve.

We have reported in The Working Capital Journal that only a small number of commercial lenders appear to be acting as if they truly understand that “We’re all in this together” — a special concern is that the largest banks (essentially those receiving federal funds recently to assist with their troubled financial operations) are NOT acting in this manner at all. This has resulted in at least two major problems for commercial borrowers: (1) banks receiving bailout funds have failed (so far) to resume a normal lending pattern for business finance funding (even though the funds have supposedly been provided to do just that, and these same banks seem to be unable to report to anyone how they are in fact spending billions of dollars); and (2) to make matters even worse, most of these banks are actually REDUCING their commercial real estate financing and business loan activities by cancelling business lines of credit and recalling outstanding loans.

The limited good news to emerge from irresponsible commercial lending activities: this has made it easier for most commercial borrowers to decide who they want to do business with in the future — namely those business lenders who are currently acting as if “We’re all in this together”. AEX would be happy to discuss with business owners more specifically which commercial lenders have been acting like responsible business neighbors and corporate citizens (and which ones have chosen “the dark side” and should therefore be avoided for all future business financing).

Dead Banks Walking

For any business owner needing a commercial loan or working capital financing, the concept of “Dead Banks Walking” should prove helpful. This description was used very accurately by the Nobel Prize winning economist Paul Krugman (New York Times - January 18, 2009 article “Wall Street Voodoo”) when he recently noted that many banks have essentially already gone broke (based upon a true net worth assessment that recognizes that many of their assets are either worthless or at least worth well below the values reflected on their books).

This observation most certainly calls into question why the government should be throwing money at these “zombie banks” (a term also used by Mr. Krugman) in the first place. But perhaps of equal importance, this viewpoint also offers small business owners some insights as to how they should select a potential source for their future commercial financing activities. Not only have most of the largest banks in the United States been shown to be worth even less than General Motors or Merrill Lynch (or Lehman Brothers — which is already in bankruptcy), but they have also almost universally shown the worst business judgment imaginable in terms of how they spend money and make loans.

This is NOT behavior which should be rewarded by astute business owners when determining which bank deserves their business. You CAN do better! AEX Commercial Financing Group is aware of several banks and commercial lenders that are visible exceptions to the “Dead Banks Walking” metaphor. Please contact us for a candid discussion about how commercial borrowers can eliminate “zombie banks” from their future business finance funding. 

Having worked with small business owners involving their working capital financing and commercial real estate financing for many years, it is remarkable to see how differently the public is suddenly treating the banking industry. Most of the negative public perception is being properly directed at banks like Bank of America, Chase and Citicorp (which collectively have already absorbed hundreds of billions of dollars in federal bailout payments and loan guarantees). Even bank employees seem to feel this way — when a woman working for Chase in New York lost her job a few weeks ago, she described her new and profound relief at not having to tell people that she worked for Chase Bank. To update the Ronald Reagan quote about government solving problems, the current perspective might be — “Banks are not the solution to our problem. They ARE the problem.”