Turning Points is dedicated to helping industry leaders survive the current recession and to prepare for success in the inevitable economic recovery.
Too Little Too Late
I got a call recently from a business owner who was in trouble. First we got through the stories about his big mean bank. Then we talked about how great and glorious his business would be if only he could borrow another $800,000. Then we looked at his balance sheet and discussed the lack of rich uncles or friends who might lend him the $800,000.His bank is actually a little mean bank but they can... Read More
Comments (3)The Wrong Bank
There's often a weird dance between lenders and less-than-stellar commercial borrowers. Banks try to politely say; "Leave" but they never really say it directly. And the poor business owner rarely understands what's being said. The worst lenders skirt the issue trying to be a friendly community lender and instead retract credit without any understanding of the damage they'll cause to the... Read More
Comments (0)The Way Forward
I met three CEOs this summer. Each of them had the same issue although they were all in different industries: manufacturing, printing and retail. They each had a (pre-recession) $20-million company that's now doing around $10mm in sales. All three CEOs were killing themselves trying to get back to $20mm when in actuality that was not the best path forward. I walked in and saw stress, strain and co... Read More
Comments (3)The Master CEO
Usually when a bank wants me to perform an assessment on one of their credits I find a business that is underperforming and an owner who has grown incapable of returning the business to its former glory. This is not the case with my Marvin Zamler. Marvin is nearing 70 years old, already has millions in savings from his last business and obsessively works on the basics of his business every single... Read More
Comments (1)Banks Ease Terms
As one lender told me; "first we saw pricing go then terms, now it's a free for all out there". After hiding through most of 2009, lenders have spent the last few years coming back into the marketplace only to find that money is over-supplied and under-demanded in today's economy. The Federal Reserve's quarterly survey of senior commercial loan officers reports a continued easing of len... Read More
Comments (0)Paging Chicken Little
Last night I talked to my neighbor, the currency trader, who is more convinced than ever that we're about to see a global repeat of 2008. I won't repeat the explanation because you'll either think I'm nutty or I'll just scare the heck out of you. But, bottom line, he's leveraging everything and going all cash until the bottom - 40% loss in global equities. I'm neither that clever nor apoca... Read More
Comments (3)Banks are Lending!!!
Seven months ago my client was presented with their bank's plan of forced liquidation. That's when they called me. Even while charging 10% interest on a fully collateralized loan, the bank had lost patience and was ready to force change. Options from alternative lenders were all in the range of 16% - 18%.Today my client has offers to lend $10million at 3% interest from four strong regional a... Read More
Comments (6)Kicking the Can Down the Road
Good news for troubled companies sweating it out about their next refinancing. Banks continue to "Amend and Extend" their commercial loans and are putting minimal pressure on companies who can continue to service the interest on their debts. According to the most recent TMA (Turnaround Management Association) survey, 60% of respondents expect to see banks as or more accommodating than... Read More
Comments (7)2-Minute Factory Assessment
This is an old trick my Dad taught me as a kid; go into any factory, close your eyes and listen ... Just listen to the noise.If it is a well-run factory you'll hear patterns in the noise. Patterns mean sequencing, which is the basis of all Lean manufacturing principles. A tightly scheduled plant will produce patterns in the noise.Then open your eyes and watch the feet. ... Just watch the worker's... Read More
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