There has been so much in the news lately about business credit and finance that it’s hard to keep up with it all. But much of this information is important for business owners to read, so we have decided to do a regular “roundup” of business and financial news.

Risky Business Gets No Love
No, I’m not talking about Tom Cruise’s teenage shenanigans in the 1980’s hit movie Risky Business. In this sense, I’m referring to businesses with risky profiles, as viewed by lenders. According to a recent article in the Wall Street Journal, many of the major lenders in this country are investing in what they see as “less-profitable but steadier” types of businesses.
Read the full article at WSJ

Like Sands Through the Hourglass - Subprime Drama Continues
Many other lending giants are posting major losses that can be tied back to the subprime meltdown of last year (and this year, and next year?). Wells Fargo posted a 38% drop in the fourth quarter, largely due to credit losses associated with the mortgage fiasco.

Consumer Spending Down, Naturally
Recent rate cuts by the Fed are not having the desired effect (desired by the Fed, anyway). It’s also unlikely that any tax rebate program is going to spur consumers and stimulate the economy. The New York Times spells out the scenario, and what it means to business credit and finance in general. Here’s my question … how much stimulus will a $300 rebate check produce when it costs nearly that much to fill up your car with gas two or three times?

But It’s Not All Bad News
Companies like Far West Capital are in a position to help many businesses with accounts receivable systems in place, even while other lending channels are drying up. We are an asset-based financing company, which gives us a certain amount of flexibility that many lending channels no longer have. We use this flexibility to find the best financing option for our customers.

If you operate your business under some form of accounts receivable system — and you’d like to learn more about our A/R financing programs and how they might help you — please contact us.

The latest installment in the subprime mortgage meltdown: Bank of America purchases the ailing Countrywide.  

In previous blog posts, we have talked about the subprime mortgage meltdown and how it created a ripple effect that spread through our economy (even affecting business credit).

As of this morning, we have seen the latest development in the ongoing “shuffle” of mortgage companies. It has been public knowledge that Countrywide — like so many other mortgage lenders — was struggling financially. Financial analysts expected that the mortgage giant would have to declare bankruptcy at some point.

But instead of folding completely and losing billions, Countrywide was sold to Bank of America — to the tune of around 4 billion dollars.

This is just the latest in an ongoing string of mortgage company collapses. Ameriquest, formerly one of the biggest subprime mortgage lenders in the country, now has what equates to a “Sorry We Are Closed” message on their website.

Thus the economical cycle continues, with its many ups and downs. We have seen it before, and we will no doubt see it again.

But how does all of this affect you, as a business owner? This is the subject of a free booklet we are preparing, aptly titled “The Ripple Effect.” It should be online sometime in February, and we will announce it here on the blog and also through our newsletter.

So if you haven’t signed up for the free newsletter yet, now is the time.