For the past month or so, Bank of America has been running television commercials telling us viewers how wonderful they are. B of A wants all of us to know that “decades “ago they loaned money to small family businesses when no one else would, and thanks to B of A, these businesses were able to grow and thrive. More importantly, the bank has a relationship with these businesses that continues to this day. All of us should feel warm and smile appreciatively.
This may well be true. But here is another truth. In the midst of a horrible business climate for many small businesses, Bank of America announced recently that it was severing lines of credit for some small business owners as the bank attempts to cut risk and raise capital. According to some newspaper reports, some small business owners with long term relationships with the bank received letters “calling” their loans by a certain date, or offering payment terms with substantially higher interest rates and monthly payments. Since most small businesses have been cutting costs and downsizing to stay afloat the past few years, losing their lifeblood – availability of credit – could be devastating. A doubling or tripling of payments could force a business into bankruptcy. Worse, some of these loans and lines of credit, according to the bank, were a part of some of the acquisitions the bank has made in recent years.( I guess they didn’t know if these loans were good or bad. Any due diligence?)
Question: Will Bank of America do a television commercial highlighting any of these small business owners and the bank’s role in their current plight?
Bank of America has reportedley received over $300 billion dollars in various bailout moneys. Apparently,the bank made questionable business decisions in acquiring Countrywide and Merrill Lynch, did not know the true condition of the “assets” it was purchasing, and tried to back out of the Merrill Lynch deal once it became obvious the losses were greater than expected. The government said no, the deal must go through. Previously, B of A was lending money to people buying a home who should not have been lent to, and using screening procedures that at best could be classified as inappropriate if not unethical.
The result of all these actions has caused Bank of America pain. Self inflicted pain. So, they lay off thousands of workers, try to charge a fee to their customers who use their debit cards, and go after a key customer base that is vital to getting our country revved up again – small business owners. While many large banks are beginning to loosen lending standards for small business owners, Bank of America pays for its sins by going after the “little guy.”
Shameless!
I have been a Bank of America customer for thirty years and will probably continue to be, but their actions anger me. If they had not made bad loans, if they had not acquired Countrywide, if they had not acquired Merrill Lynch, where would a prudent and industry leader find itself today? I can only wonder.
What does this have to do with notes? Everything. The lack of credit creates a larger need for individuals and small businesses to access capital thru the use of alternative funding sources. More and more people will sell their property or business by offering the buyer a seller carryback. The Archives of this newsletter are filled with ideas and suggestions on properly structuring a note transaction. Please take advantage. Please tell your friends.
Please call or email me with any questions or help in selling your note.
Sincerely,
Denny Stanz
CA Broker License # 01915404
760-245-5366
760-245-5367 fax
dennystanz@verizon.net
www.CaliforniaNoteBuyerLLC.com
