How the credit crunch affects you

Many people don’t understand the mechanics of a credit crunch and how it affects them. Banks are not going to hang a sign on the door saying, “we are preoccupied with our own problems and we don’t have much interest in yours”, but there have been changes and these will continue. If you are a typical public company bank CEO the only thing your investors want to know is when you are going to be done writing off bad loans and investments.

You are busy raising new capital and liquidity from very expensive sources. The regulators are hammering you about loans they had no problems with two years ago. The last thing on your mind is whether your lenders are making new loans at Prime. The reality is that individuals and businesses with a good credit history and a reasonable plan still have access to credit. The terms will be a little tighter and the rates will be a little higher than they would have been several years ago.

They will need to be dealing with banks that have been able to maintain a focus on the value of long term relationships. This should actually be a time for all prudent borrowers to take advantage of the decline in asset values that accompany a credit crunch. I wouldn’t dream of picking the bottom or urging people to jump with both feet into investments. If you use the same prudence that kept your powder dry, you will have great long term opportunities. If easy money chases out smart money, tight money attracts smart money.

Post a Comment

Your email is kept private. Required fields are marked *

Fraud

Scam Awareness: How to Beat the Sweepstakes, Lottery and Prize Scam

Tuesday, March 21, 2017

You’ve won a new car or a dream vacation or cash—in a contest you never entered! This sounds too good to be true because it’s a scam. This con fools you into thinking you’ve won a prize or lottery jackpot, but you need to pay upfront fees to receive it. No matter how much you [...]

Financial Topics

Viewpoints - August 2017

Monday, July 24, 2017

Latest updates from our friends at Northern Trust. Viewpoints August, 2017

More

Business Pulse - Cybersecurity has emerged as a major issue for CEOs

Monday, July 27, 2015

CEOs Express Concern about the Cybersecurity of their Business. Read the full report here. Business Pulse – JUNE 2015 EXECUTIVE SUMMARY CYBERSECURITY  

Nicolet Bankshares, Inc. 2nd Quarter 2015 Earnings Release

Tuesday, July 21, 2015

Nicolet Bankshares, Inc. (OTCQB: NCBS) earnings release for 2nd quarter 2015. 2Q15 Earnings Release

How to Ensure a Good Credit Score

Wednesday, July 8, 2015

First, let’s understand how your credit score is determined. Your credit score is broken down into five categories weighted accordingly: Payment history = 35% Total amount owed = 30% Length of credit history = 15% New credit = 10% Type of credit in use = 10% MAKE YOUR PAYMENTS ON TIME. This is the most [...]

Tools

Font Size
Contrast