financing facilities in the $2-5 million
range. Many of these are essentially
solid companies that are going through
a challenging period due to an industry-wide downturn such as manufacturing.
Herein represents the opportunities
for niche players. Our challenge is to
translate these potentially short-term
customers into long-term customers. At
Maple Trade Finance, we have experienced extraordinary growth during the
past few months. We are determined to
win the confidence of these new clients
and to maintain these client relationships, once the world begins to recover
from this downturn.
W. David Tull, chairman, Crestmark
Bank, Troy, MI
As the economy continues to soften, the
question of what industries are likely to
see asset-based lending growth might
be better asked, “Which ones will not?”
With the decline in same company sales
from 2008 to 2009, the balance sheet
of many, if not most, businesses will
deteriorate. That will necessitate more
companies turning to ABL financing.
Clearly, manufacturing will need additional working capital, either to fund
losses or to bridge the gap until they
are functioning at a greater capacity.
Transportation companies will need to
refinance their fleets and will need working capital. The staffing industry may
suffer in the near term, but as business
begins to pick up, they will see companies not want to hire full-time until they
are confident that the expansion is real.
The same scenario will affect myriad
types of service companies ranging from
tech to engineering.
As an asset-based lender, we know
the opportunities to lend will be abundant; however, the ability to get the
transactions done will be more difficult.
Cash flows for equipment financing will
be stressed and valuing the collectability of receivables and inventory will
be challenging. We are in for some very
interesting times. We will need to stick
to the basics! TSL