Does Michael Vick’s alleged canine chicanery and the meltdown in the subprime mortgage market mean anything to the current state of small business financing? Being a former commercial banker and seeing the last few business cycles… my thought is that both of these seemingly unrelated events will have a “tightening” effect on the market for small business credit and loans. If history is our teacher, as it always is, a seminal event most certainly makes us stop, take a look at the details and ask questions like, “huh, should we be loaning money to people with no money down and bad credit”?

After a period of unprecented global prosperity, where all asset classes: stocks, bonds, commodities, real estates, currencies, have risen and risen together in lock step, we are now asking questions of ourselves… albeit… after the fact. As is always the case, human tendencies make us watch our 401(k)s and cheer, but point to the excesses of others. Dog-fighting is the most recent in a spate of predilictions perpetrated by professional athletes, e.g., Kobe Bryant’s alleged rape situation, steriod use in baseball and cycling, NBA officials gambling, strip club shootings, etc… As the stakes have risen and pop culture has drifted to a “zero tolerance policy”, we are now in a very introspective period. All of this “questioning” is going to cause the pendulum of credit to swing back to conservative underwriting…. which brings us back to you… the consumer of commercial credit and banking services.

Not to worry, this is a healthy swing and will not leave you without alternative sources of capital for your company. Privately financed companies such as Far West Capital are free from regulatory agencies that tend to overeact and swing too far. It is a healthy purging of excess that has to happen in every cycle, and we are confident that American ingenuity will again see us through. Our experienced management team has been through the fires of ups and downs, we are particularly suited to understand relationships that many banks may consider “out of the box”. So, if you are looking for a working capital solution free of the dog-fighting, subprime induced mania that may infect your local banker’s normal sense of reasonableness, give us a call, we listen and we care about your plans.