Small Business Owners and Bank Rage

Bank rage is emerging as a practical issue for business owners and {business financing~Bank rage is emerging as a practical issue for business financing and small business owners~Bank rage has become a practical concern that cannot be ignored for small business loans and small businesses}. Some of the key factors producing the bank rage are covered within this comment. There are also some realistic business finance solutions for business owners to consider, and one of these options will be briefly described.

commercial property owners are rapidly discovering firsthand that banks are not what they used to be~An observation that small businesses are rapidly discovering firsthand that banks are not what they used to be is as good a starting point as any for a better understanding of bank rage~An acknowledgment that business owners are suddenly realizing that banks are not what they were just a few years ago is a practical starting point for understanding the bank rage that has become commonplace}. Many small business owners are finding that they need commercial financing help for the first time in a generation due to the severity of recent economic turbulence. A revision in how banks are able to take risks is a major underlying factor for this very real small business problem. Banks have seemingly stopped making commercial loans involving risks which were previously acceptable. The risk-taking activities for most banks no longer emphasize small businesses but instead high-risk opportunities offering the bank a higher profit possibility. A key example is how many banks over-leveraged their balance sheets to invest in portfolios of risky residential mortgages only to discover that investments do not always go up in value. Because they are virtually worthless or it will be a long time before they could be liquidated at a break-even price, these securities are commonly called toxic assets.

A related issue now being scrutinized more intently by business owners is how banks are actually spending their scarce resources, and the result of this analysis is clearly producing a massive share of bank rage. working capital management for small business owners and commercial property owners, many well-known banks are paying million-dollar salaries and bonuses to employees who have already taken their employers to the brink of disaster~Many well-known banks are paying million-dollar salaries and bonuses to employees who have already taken their employers to the brink of disaster rather than using their scarce resources for traditional uses like working capital financing for small business owners and commercial property owners~Banks are repeatedly reporting that they have paid million-dollar bonuses and salaries to employees who have been directly responsible for losing billions of dollars for the banks rather than using their scarce resources for business financing programs benefiting commercial property owners and small businesses}. Typically paying as little as three cents on the dollar in cash and leveraging the remainder with debt, banks which should have known better unwisely invested in multiple varieties of what are now referred to as toxic assets. It is of course accurate to point out that the money being invested in the future toxic assets was really capital provided by shareholders and bank depositors. One of the most preposterous illustrations is the repeated number of examples in which banks paid out billions of dollars to employees responsible for worthless investments even after the banks reported losing billions of dollars as a result of those transactions. Most pragmatic observers will readily say that this is no way to run a bank, while a few will joke that this is nice work if you can get it.

As one unsurprising result, the good banks have been stigmatized by the behavior of bad banks. For purposes of this brief comment, the most practical commercial finance solution which should be actively evaluated by most small businesses is determining whether their current banking relationship involves one of the bad banks or one of the good banks. At the end of the day, we all need to get beyond the prevalent bank rage and move forward. Realizing that firing their banker might be the most appropriate course to follow will be an important option for small business owners to prepare for in looking out for their own best interests.