Business Financing Quiz Questions and Answers
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This report is intended to alert business owners about potential lending problems at an early point when it is more likely that necessary action can be taken before it is too late rather than serving as a complete small business loan examination. The brief business financing quiz shown below illustrates one way to explain the recent lack of adequate commercial real estate loans and working capital funding by banks to small businesses.
When lenders say that funding is available even when it is not, is this sometimes called phantom business loans?
Yes, and the terminology builds upon a similar usage by technology engineering firms in announcing products often classified as phantom software when they wanted to discourage consumers from purchasing from a competitor even though the company that made the announcement did not actually have an item currently for sale to the public. Because there were so many documented instances in which the phantom software never materialized beyond a press release, the practice was usually viewed as controversial. The world of small business lending has now apparently adopted this questionable public relations ploy.
Are there really any good banks still standing? After the financial bailout, are banks still failing?
Yes seems to be an appropriate answer to both questions. Unfortunately it has become increasingly difficult for innocent bystanders to tell the difference between a bad and good bank. Because there continue to be ongoing weekly reports from the Federal Deposit Insurance Corporation about bank failures, it should be apparent that there is still a lending crisis that was not resolved by the bailout. While neither bankers nor politicians want to talk openly about this situation, the rest of us can still draw our own conclusions.
Are banks required to provide small business lending after they were given taxpayer funding by the financial bailout two years ago?
No, there were not such conditions placed upon the banks when they were saved by the taxpayer funds from almost certain financial collapse, and except from the viewpoint of the bankers themselves this is a mystery worth examining in much more detail. Instead the recipients can effectively do what they want with the money because the assets are considered to be fungible. This seems like a term invented just for such an occasion. As used for banking purposes it is not possible to say what happened to the money given to the banks because the monetary assets are interchangeable with other funds. Most banks saved from financial collapse now appear to be investing a significant portion in what most observers consider to be risky areas similar to what got them into trouble at the beginning of this crisis, and in any case there were no restrictive conditions which would require banks to provide any particular amount of commercial loans. |
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Author Resource:-
Stephen Bush and AEX Commercial Financing Group are an expert source of commercial loan help - Stephen has offered merchant financing and business financing options for 25 years. Please visit the AEX website at http://aexllc.com
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By :
Jessie Stone
Submitted
2010-11-03 16:39:44 |
Article From Article Mayhem
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