The Research Design Associates Blog


Finding your way in the new banking environment

Getting to know the new sheriff. Whether you are an established bank customer or seeking a new relationship after the recession, everyone has to get to know the new regulatory sheriff and banking reality. Be prepared for the reality that your collateral will be discounted substantially in value to cover your loan. Bankers always believe the market for your collateral is headed south so they want to stay ahead of the curve. And they have to include the cost of asset sale. New lending guidelines make some assets seem worthless. Bankers, while often accused of being simple minded, can no longer afford to be mesmerized by dog and pony shows where borrowers attempt to “hide the ball”. Either the ball is there, or it is not. If it is not there, don’t pretend it is because you will look stupid when they find it is not. Conversely, if the ball is a stinker, don’t try to hide it because they will be mad when the turd surfaces.

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I’m OK, but is the bank I want to borrow money from OK?

Should I be borrowing from my bank? Are they solvent? How can I know what shape my bank is in? When is it time to abandoned my bank? Who can I trust? Texas Rations and Tier One Capital Ratios are available. Investigate your bank to assure they are as worthy of your business as you have to demonstrate you are of their money.

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I Need A Loan

What do I need to do to get a loan and what bank can I trust? Looking for a new bank is a lot like the “dating” game and the ”vetting” process is often long, awkward and may involve several/many banks. You need to find a good personality match as your banker is your “salesman” who takes your case. Start where you are already known, preferably where you have an existing banking relationship, provided it is a “healthy” bank .

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My Comfortable Banking Relationships

When asked to participate in this blog I was asked to write about my knowledge of and experiences with lending and borrowing money, I had to laugh. This subject is broader than it is long, deeper than it is wide, and changes daily. The only consistent answer that I can muster is if you absolutely, positively, do NOT need the loan, you have a 75% chance of success.

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The Small Bank Mess

My business career has reached from loan officer in a regional bank through being a successful single family home developer to now attempting to create jobs and jump start sales of first time homes. Fortunately my thinking has led me to be just ahead of the market.

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