Linda Keith CPA

Alphabet Soup: 5 Terms Borrowers Won't Recognize

Fri, 13 Nov 2009 15:40:56 -0800

Lender Lingo makes talking amongst ourselves quick and easy. It can lead to confusion with borrowers, though.

Confusion in lending agreements is a recipe for disaster! (See how nicely I tied in that soup metaphor?)

Here are some letters I hear all the time. This list is not for you, it is for your borrowers! Don't use these shortcuts around your borrowers unless they know them, too.

DTI

Debt to Income...the ratio we use to determine if the personal debt of the owner/guarantor is more than they can afford based on their income. Heck, we don't even mean income in that ratio. We are looking for cashflow.

DCR or DSR

Debt Coverage (or Debt Service) Ratio...This is the flip of the DTI. Or if you liked algebra in high school, you might remember it as the reciprocal. It is used in small business, commercial and commercial real estate lending. It compares the Cashflow Available to Pay Debt to the debt. A 1-to-1 ratio would mean they just have enough cashflow to pay the debt. We used to want 1.2-to-1 (a 20% cushion). These days we are more likely interested in 1.25- or 1.3-to-1.

HELOC

Home Equity Line of Credit...otherwise known as the substitute for charge cards or personal savings before the sky fell and people needed to start living within their means. (Oh, did I write that out loud?)

I am not asserting that every home equity line of credit was used irresponsibly. Some people used it to remodel their home or buy a needed vehicle. Or perhaps pay off an unexpected medical bill.

The challenge with the HELOCs was the drop, in some areas precipitously, of home values. With the combination of a mortgage that might have been 90% LTV (see below) and a HELOC that brought the total loans secured by the home to 125%...well, you can see the problem.

LOC

Line of Credit...not to be confused with the HELOC. This is typically for commercial or business use. The anticipated use is usually to gear up for seasonal activity (buy inventory for holiday sales) or to take care of a short-term need (such as a major roof repair before refinancing a building).

There is a lot of pressure on lines of credit (often called operating lines) as business borrowers' fundamentals drop, they miss loan covenants or the value of the collateral is impaired.

The lines of credit are expected to be at zero at least part of the year. If the borrower cannot retire the line when promised, the lender has the option to extend it, term it out (set it up for payments that will retire the line within three to five years), or take the collateral.

LTV

Loan to Value...the relationship between the amount of the loan and the value (fair market) of the underlying collateral. Once again, reductions in property values caused havoc with LTVs.

Besides, when the sun was shining and someone convinced too many other someones that real estate values would go up forever, lenders were comfortable with up to 100% LTV. No longer.

What other terms are you using that your borrowers do not understand?
Do you think they'll ask if they don't understand you? Actually, I think most of them will not. Scary but true.

Letter from my failed bank...It's hard to say goodbye!

Mon, 09 Nov 2009 16:04:03 -0800

My bank was among the first 100 to be shut down by the FDIC and handed over to another bank. As an account holder, of course, my deposits were covered. As a shareholder, I lost my investment. Now it's personal!

More banks are under FDIC Cease & Desist Orders:

Before I share with you the letter to the shareholders of my failed bank, let me say...
It ain't over yet.

Just two weeks ago a bank that had a local program** scheduled emailed me that our 'date' was off. Their parent bank was hit with a Cease & Desist in early October and instead of hosting a local session of 'Tax Return Analysis in a Tough Lending Environment' they'll be hosting the FDIC. No question, they'd rather have me.

**Local programs: If you have any lenders to train and a space to do it

You and I get on the phone and find a total of 5 lenders confirmed.
I put it on our calendar and promote it.
I promise to show up for as few as five, although we often end up with more.
Your bank or credit union gets one free attendee, and does not have to travel to my usual open-enrollment locations or wait for my next program.

Then, at the end of an open-enrollment training I did this month, one of the lenders came up and confided that they are under a Cease & Desist as well. This lender was taking advantage of the 'refresher' option (open-enrollment attendees can attend again at no charge for up to 2 years) since the lender has some extra time right now and updating training is a good use of that time for everyone concerned.

The FDIC is very busy and community banks (and some credit unions) are seeing tougher times as commercial real estate loans come due (with impaired collateral) and commercial lines of credit come up for renewal (with some business borrowers weakened by the recession).

This feels like banking's version of the swine flu!

My bank's 'Dear Shareholder' letter:

Yes, it feels like a break-up. {I have taken out identifying information although if you really care, I am sure you can figure out who I am talking about.}

Dear Shareholder:

It is with deep regret and profound sadness that I write to inform you that {Bank Name} has lost its long, arduous battle to survive America's worst economic crisis since The Great Depression.

Despite wide-ranging and intense efforts by your Board, management and executive teams to find sufficient new capital, the FDIC officially took control as receiver of the Bank on {Date}.

While the answers to some important questions remain unclear, others are now certain:
All deposits are fully protected by the FDIC. We have worked diligently to ensure that all of the nearly {amount} in deposits were covered and that no customer deposit loss is expected.
The FDIC entered into a purchase and assumption agreement with {Purchasing bank}.
We believe all value in the shares of the parent company, {Holding Company Name}, has been irretrievably lost. The corporation is insolvent and is unable to file financial reports for the fiscal years 2008 and 2009. Although the disposition of the liabilities of the holding company is yet to be determined, the primary asset ({Bank name}) is now in the possession and control of the government. We recommend you consult your tax advisor to determine how this loss may impact you.
We know you are asking how this could happen to a bank that effectively and profitably served the {geographic} area for more than {number of years}. Those of us who have worked day and night to save the bank know there is no short answer to this question. Nevertheless, it is our obligation to explain the facts as we know them.

At the heart of {bank name's} demise was the loss of our investments in the mortgage giants Fannie Mae and Freddie Mac and the severe economic recession. As "Government Sponsored Enterprises (GSEs)", preferred stock in these companies was considered safe and contained significant financial and tax incentives. At the time these companies were placed in conservatorship by the U.S. government, many large financial institutions and approximately 1,100 community banks were invested in this preferred stock.

When they were placed into conservatorship in September 2008, {bank name} lost more than $42 million. The Bank's investment in each of these entities was only approximately 10% of our investment portfolio, but the loss was devastating. As a result, we had to immediately stop our $20 million preferred stock offering to accredited investors and reassess our capital needs and available options.

At almost the same moment, a "perfect storm" of economic chaos struck the country. Nationally, the financial system became paralyzed; credit and capital markets froze, making it difficult for community banks to raise capital.

At the same time, the severe economic recession put intense pressure on our loan portfolio. Though we did not have any of the subprime loans that led to the crisis in the first place, the strain was significant. The resulting drop in collateral values, job losses and recessionary forces left many loan customers struggling to make payments on time. As a result, our nonperforming loans increased substantially as did our loan losses. We allocated more resources and worked diligently to collect our loans.

Due to these factors, {bank name} was not in a position to qualify for help under the government's "TARP" capital purchase program.

We slashed costs. We reduced staff, eliminated salary increases, eliminated director's fees and employee bonus plans, and our employees and directors forfeited stock options. We scoured other cost areas for reduction.

We hired investment bankers, legal advisors and consultants to help us raise capital. Our advisors searched the country for investors or potential buyers and merger partners, and we met with every potential investor expressing an interest and analyzed alternative ways to meet the capital challenge we faced.

Throughout most of the last year, investors were concerned about where the bottom of this recession might be. As credit markets began to show early signs of thawing, potential investors showed increasing interest in {bank name}. We had secured letters of intent to invest as much as half of what we needed and were poised to attract further investment.

But we recently faced two additional challenges with investors. First, some investors and banks are more interested in acquiring a bank from the FDIC out of receivership than traditional merger and acquisition transactions as they can obtain the FDIC's guarantee against future losses. Second, the FDIC recently issued a policy statement that private equity investors would be required to maintain twice the amount of capital at the bank than would be required if it was not owned by private equity investors (such as other banks).

With the above factors in play, we were unable to find the capital we needed in a timely manner.

We fought. We fought early. We fought intensely. In spite of this, it became clear that we were schedule for a closure date on {date}. When that date was imminent, we took a step in an effort to east that transition for customers and employees. On {day}, {date} we acquiesced to the {state agency} for an orderly closure of the bank.

The number of community bank failures across the United States is a real shame. Community banks finance small business which is the economic engine of this country. The loss of community banks is tragic for this country; not only for their customers, but for the shareholders, employees, and community they serve.

We are intensely aware that the bank's failure will adversely affect you and all of us who are shareholders in {holding company name}. We know the losses we all face may affect our lives into the future. We are all deeply sorry and saddened by this.

Sincerely,
{Bank Holding Company Chairman}
{Bank President}

It is hard to say goodbye...

I am deciding this week if I'll stay with the new bank. I have no relationship with this out-of-town financial institution. But I do have a relationship with (and care about) the people who are still there.

Then again, there are other banks in our community that I have also liked and I am inclined towards 'the locals'. We'll see...

Meanwhile I still have the cute mini-bank bag with the bank's name on it from the last shareholder meeting. Think I can sell it on eBay?

10 'Must-have' Controls: Embezzlement Risk on the Rise

Fri, 30 Oct 2009 10:25:50 -0800

The world's largest Rotary Club in Seattle was the victim of a $350,000 embezzlement. If you lend to non-profits (including churches) you should be aware of the simple steps they can take to reduce the risk.

Non-profits have been hit harder than many businesses in this recession. As they cut staff to cope with dropping contributions, their risk of embezzlement goes up. The recession also increases one of the key elements of fraud, an employee in financial trouble who has access to funds.

In a Puget Sound Business Journal article you can read more about how the bookkeeper pulled this one off. They quote Jack Siegel, author of "A Desktop Guide for Nonprofit Directors, Officers and Advisors," on his top 10 list of financial controls.

Ten controls that every charity should have

-- Require two signatures: Checking and investment accounts should have two signers, independent of each other, at least for checks above a certain threshold amount.

-- Check bank statements: They should be reconciled by someone who does not have signature authority over checking accounts.

-- Avoid cash: Especially susceptible to theft, cash should be eliminated as much as possible. For example, churches should consider asking congregants to enroll in an automated withdrawal program.

-- Check the vendors: A list of approved vendors protects against phony invoices submitted by insiders.

-- Verify the payroll: Many charities have discovered ghost employees. To minimize this risk, organizations should develop a system of reports between payroll/accounting and the HR department.

-- Control reimbursements: All expenses should be pre-authorized.

-- Take inventories: Physical inventories should be taken on a regular basis, and reconciled against the inventories carried on the books.

-- Rely on budgets: The nonprofit's employees should prepare the budget, but the board should review or approve it.

-- Bid out purchases: Purchases above a certain threshold should be subject to a competitive bidding process. Look for meaningless requirements that may be directing a grant to an insider, or evidence of collusion, such as two vendors alternating high and low bids.

-- Learn about grants: Learn to understand allowable costs, overhead recovery and other issues that come with grants.

With very little adjustment, you can apply this list to any small business as well.

What other signs do you look for that make a business or non-profit susceptible?

Business in a Sinking Ship? Time to Get to Work

Tue, 27 Oct 2009 09:14:29 -0800

Many business lenders have been 'recruited' to the work out team. If a business is not in deep trouble yet, your bank's workout team may not have time to work with them.

In the Forbes.com Turnaround Tactics article How to Patch a Sinking Ship, Marc Kramer covers five areas he assessed when his start-up business was heading off course.

Here is a quick summary plus some of my thoughts. They are written from the perspective of the business management team so just shift the focus if you are assessing the management team's efforts.

Value Proposition

Consider strengths and weaknesses of the company.
Have someone else survey current and past customers to see what they say is important. Don't assume.
If you cannot afford to hire out a survey, consider someone you trust from another business and do the same for them.

Competition

Are they really winning or are they in the same shape as you are?
If they are winning, is it on price? Better marketing?
Are they winning short term but harming their brand or their opportunities for long-term success?

The Market

I loved Marc's insight on this...Are we trying to sell to the market we wish wanted us instead of a market that really does?
I would add, is there a parallel market that we could serve?

Sales

What about the sales process is not effective?
What worked pre-recession may not have worked during the recession.
What worked pre-recession may not have been the best process anyway.
Evaluate and consider something different.

Personnel

Right people?
Right positions?
Right number of people?

Read Marc's entire article on How to Patch a Sinking Ship. Marc Kramer is an instructor at the Wharton School at the University of Pennsylvania and President of Kramer Communications, a company that develops business, sales, operating and marketing plans and Internet content strategies for Early Stage to Public Companies.

What other turnaround strategies have you seen work well?
How do you approach your business borrowers with these ideas so that you don't offend them?
Any concerns about 'lender liability' by appearing to advise the business borrower?

Impact of SBA Changes on Lending Volume

Mon, 26 Oct 2009 19:11:10 -0800

One of my favorite 'work-out' lenders shared her update on SBA Changes, both with the increased guarantee and the SBA American Recovery Capital (ARC) program. Pere Mageo is the Vice President and Department Manager, SBA Credit Administration at Pacific Capital Bank in Southern California.

Listen to this 3 1/2 minute segment and find out why the new guarantees don't help existing loans and why so many SBA lenders are not participating in ARC.

How are the SBA changes helping or hurting your business lending efforts?
How about in your part of the country?
If your bank is participating in the ARC lending program, why? How is that working for you?

If you can't make the loan...Understand lease options

Fri, 23 Oct 2009 08:17:45 -0800

Every business lender needs to know all the options when your business borrower needs new equipment.

Is a loan from your bank or credit union the best choice?
Is it even an option given the borrowers current financial condition?

If not, perhaps a lease is a good option. By understanding leases and having at least three leasing companies to recommend, you will still be at the hub of your business borrower's financial resource wheel.

As always, knowing the lingo is an important part of being, and appearing to be, informed. I found this glossary of lease terms at Alliance Commercial Capital, an equipment leasing company since 1983. It covers...

Closed End Lease
Conditional Sale
Fair Market Value
Finance Lease
Full Payout Lease
Lessee
Lessor
Master Lease
Net Lease
Non-cancellable Lease
Operating Lease
Put
Sale and Leaseback
True Lease
Useful Life

And at the end of the list they explain end-of-lease options and payment options.

Here is the list.

What other resources do you recommend to your business borrowers when you can't make the loan...or just because it is a better option for them?

What to tell CLOs about needed guideline changes...

Thu, 22 Oct 2009 10:09:16 -0800

I'll be presenting to Chief Lending Officers from Credit Unions around the country at the CUNA Lending Council 2009 Conference. Sure, it is likely the attendance will be down as it is for many business meetings these days. But the CLOs who will be there will be from the Credit Unions who are doing well, relatively speaking.

I am going to make four recommendations for guideline changes to allow us to say 'YES' to good loans even as the '08 and '09 tax returns show the worst historical years of the recession.

Was 2009 a good year?

If your business borrower (or business owner on a personal loan) had great success during the recession, no problem. But if they suffered as did many businesses and things are looking up in 2010, our usual review of historical data from tax returns may not give us the needed information to make a good decision.

In a previous post I made the case for why your business borrowers and business owners are likely to file their 2009 returns early. I think we'll have to cope with that historical data sooner rather than later.

My session at the Lending Council Conference

Helping your Self-Employed Members in Rough Waters: How to Say "Yes"
Linda Keith, CPA, Loan Quality Consultant/Trainer, Linda Keith, CPA, Inc.

In the best of times, consumer and mortgage lenders can find it difficult to qualify self-employed members. Now it is tougher. You'll take back three tools to help your lenders say 'yes' to self-employed members:

Adjustments to get from Taxable Income to Recurring Cashflow
Where and how to dig deeper when the first result is a 'no'
When a red flag is not red after all

> See Linda talk about this session here

Join the conversation

If you were me, what would you recommend to Chief Lending Officers of credit unions and of banks on how to make good loan decisions when the recent historical information is so different than your best guess as to their near-term prospects?

Training in your city? Eugene & Santa Rosa scheduled

Sun, 18 Oct 2009 10:51:08 -0800

For lenders more than an hour from my usual open-enrollment cities of Seattle, Portland, Burlingame, Pasadena and Anaheim, travel time and money may be keeping you 'out of class'. No longer.

In both Eugene, Oregon and Santa Rosa, California we have banks and credit unions making space available in their conference or training rooms to accommodate a local workshop on Tax Return Analysis in a Tough Lending Environment.

You can, too!

In Eugene, both the banking association and the credit union league chapter are

promoting the training
offering discounted registration fees for their members
sharing in the revenue once five of their members have signed up

Do you have an active chapter of a bank or credit union association in your city?

In Santa Rosa, a local bank training director called around to neighboring banks and made sure she had at least five lenders to attend. Then we put it on the schedule and have reached out to the banking association and credit union league chapter to see if they want to join in to offer discounted fees for their members and share in the revenue.

The new normal...

If reduced training and travel budgets will be the new normal for awhile longer this is a great way to get the training you and your lenders need now. We'll promote the training on our website and if you are in a geographic area where we have contacts, we'll also participate in promoting the training through our list.

Call Kimberly a 360 455 1569 or email her at Kimberly@LindaKeithCPA.com and tell her if you have as few as one person interested and if you have a meeting space we can use. We'll work together to make it happen.

On my radar...

Washington: Spokane, Wenatchee, Walla Walla, Port Angeles, Bellingham, Olympia, Tacoma, Tri-cities, Yakima
Idaho: Boise
Oregon: Eugene (scheduled), Medford
California: Redding, Sacramento, Santa Rosa (scheduled), Stockton, San Luis Obispo, Santa Barbara, Ontario, San Diego, Chico

Are you in another part of the country than my usual programs? Lenders from as far away as Colorado, Tennessee and North Carolina have flown to the West Coast for our programs. I'd be happy to come to you.

Help me help you.

Are you in one of those cities and want to help get the ball rolling? What cities are not on my radar but should be?

Quit wishful thinking...'09 returns will be filed early!

Sun, 18 Oct 2009 10:00:20 -0800

Lending to businesses and to business owners will be harder in the recovery than it was in the recession. The pre-recession year's are dropping off our radar and the worst years of the recession are coming on.

Don't count on it...

If you are hoping that you won't have to take the '09 returns into account until October 2010, I think you'll be disappointed. Borrowers who often extend their return and legitimately file as late as October may file early next year.

Money now or money later?

Why would they file early? If their business kicked off a Net Operating Loss the congress has provided a new opportunity to carry those losses back further and with more flexibility to allow for a refund of previously paid taxes.

If your borrower already took this into account and paid in less taxes they may not be in a hurry to file. But if they did not, they'll want that refund as soon as possible.

I don't think we can count on the usual extensions delaying the '09 returns until October.

Guideline changes needed now...

I am talking with Chief Lending Officers and seasoned lenders from around the country about how to qualify our borrowers (business loans or personal loans to business owners) as the historical information gets worse just as the business starts to do better.

Any ideas?

Lending in the Recovery: Three suggestions to help you say 'yes'

Thu, 15 Oct 2009 13:24:50 -0800

No more excuses...the 2008 returns are here!

In October, the 2008 returns will finally be filed by all individuals (including sole proprietorships, one-owner LLCs, S Corp shareholders and LLC/Partners filing 1065's). When you can get the 2008 returns, you'll be dropping from 'history' the oldest tax return you usually use.

Do you use the latest 3 years? That will now be 2006 (pre-recession), 2007 (just getting started) and 2008 (well into the recession for many businesses). Your 2009 year-to-date financial statement may not look so great, either.

Do you use the latest 2 years? Much worse! You'll be using 2007 and 2008 tax returns and considering 2009 year-to-date financial statements.

Stuck with the bad numbers until 2012!

And if you follow along this path too long, you'll realize that we'll be stuck with recession era tax returns (for businesses struggling part or all of the way through 2009) through the end of 2011!

We are using the worst of the recession years to try to justify the business loans needed to ramp up for the recovery!

Alternatives?

Add one year to the number of year's tax returns you use. If two years, move to three. If three years, move to four.

Include year-to-date financial statements in your averages if that is the basis for your assertion that the business is improving.
- You may need to request a higher-level statement. If you usually accept borrower-prepared you may require CPA-prepared. If you usually accept CPA-compiled, you may need to request CPA-reviewed. (Yes, I know that will cost your borrower money. But what will it cost them if you decline the loan?)
- If your borrower is telling you that the major improvement in their operating results is coming toward the end of the year, consider requesting the year-to-date broken out by quarters. This will allow you to show the upswing you are considering as a major factor in the loan decision.
- If your guidelines do not allow for including year-to-date information in your averages, do this as a side-calculation and use the results in your written write-up.
Expand your write-ups. It is likely you will be making more assumptions about the upturn based on conversations with the borrower, observations about improved business conditions in your geographic area for that industry, and other factors that do not come directly from financial statements or tax returns. Written commentary will be essential to 'sell' the loan recommendation to the decision-makers or explain the loan decision to the regulators.

Do you see this as a challenge? What are you and your financial institution doing to gear up for the improved business environment and your need/desire to lend in the face of historical cashflow calculations that will not support current loan requests?

Plan to Capsize! 7 Steps to Survival and Success

Tue, 13 Oct 2009 18:09:35 -0800

Do these sensations feel familiar?

Upside down.
Under water.
In the dark.
Can't see clearly.
Running out of air.

Many banks, many lenders, many businesses, and many business owners have felt that way at least once in the last two years. Some of you...once a month!

In kayaking we call that a capsize.

We plan for it. We train for it. We have the equipment to recover from a capsize. We assign roles in rough water. We dress for the water temperature, not the air temperature. We can rescue ourselves if need be. We paddle with others to improve our chance of survival and success.

A professional association gave me the caricature above as a thank you. And yes, those are dollar bills in the water!

You likely know me for consulting financial institutions on guidelines and intensive, hands-on training for lenders in tax return and financial statement analysis. Did you know I also speak at conferences?

Plan to Capsize! Seven Steps to Survival and Success

This speech for banking and business associations is a funny look at a serious subject. I take the lessons from my kayaking experience and interpret them to improve your survival and success in banking or in business.

Do you belong to a banking or business association with state or national meetings?

Let me help make your next conference even more relevant and even more interesting.

Call and ask why the Certified Speaking Professional designation I hold reduces the risk of hiring me as a speaker
Contact your association and recommend this topic
Oh, and don't forget to recommend me to present it! '-)

What other steps do you think are crucial to survival and success?

Say 'No' if managment is not up to it...

Tue, 06 Oct 2009 08:40:34 -0800

Want to go kayaking? It is a water sport...you are going to get wet on occasion.
Want to be in banking? Lending is risky...you are going to lose on occasion.

The less problem loans, the better. So this is a good time to recalibrate your antenna to detect loans that will work from loans that will not.

One of the big indicators for a business loan is the ability and resources of management.

Signs of trouble:

Management either has not considered or is unable to implement common strategies for navigating through a downturn such as

refocusing on core business or customers
improving collections
decreasing or re-purposing workforce to reduce reliance on outside contracts
selling underutilized equipment and leasing as needed until business rebounds

I am not suggesting management implement these specific strategies, or even all the strategies they consider. But you want to know management is considering reasonable strategies and has selected a strategy that is as well thought out as possible in difficult times.

How to decide if they are up to it:

Communicate with them besides when they are asking for a restructure.
Visit their business. Ask questions about process, or inventory control, or marketing. You may not know what the answers should be but listen to the level they think at and talk about.
Ask about the strategies they are implementing, even ones that they tried but did not work, and how they are revising as they go.
Where you think their management knowledge or skills may be short, especially if they are in a small business without a management team, find out if they seek help as needed either from outside consultants, their CPA or attorney, or a board of advisers.
Consider if they are so 'in the trenches' that they have no time to look up, see what is coming, and revise their plans as needed. (My business coach, Lenora Edwards, calls this working 'in' the business instead of 'on' the business.)
Find out if they are active in trade, professional or business associations resulting in access to information and advice from other manager/business owners in their field.

When preparing to meet with your borrower, especially if they are needing to restructure a loan or are reporting a missed covenant, be ready to talk about what they are doing to resolve the problem and any success they are already seeing in that direction.

What other signs of good management impress you when considering a loan?

Say 'No' if you can't trust them...

Thu, 01 Oct 2009 10:49:37 -0800

In sea kayaking, you have to trust the people you are paddling with. Even if you are already at the boat launch and ready to go, if you get a bad feeling about a fellow paddler, you should pack up and go home.

The trust problem in kayaking is more likely to be a paddler who is unprepared or unwilling to follow the leader and may compromise the safety of the trip. In lending, it really may be about honesty.

Signs of trouble:

They keep critical, required information from you because they think it will look bad.
They either admit to, or get caught, providing inaccurate or misleading financial statements and/or tax returns.
They admit to (or even brag about) what appears to be underhanded treatment of employees, customers or vendors.

Signs of trustworthiness:

They communicate early and often if they are going to miss an agreement.
They provide accurate information. If their tax return does not reflect their cashflow for legitimate reasons (ie:because it is cash basis or includes significant nonrecurring expenses or losses) they explain why while making it clear that their company filed accurate returns.
They demonstrate their high level of honesty and ethics by sharing their stories of honest dealings with others. If you, the lender, are new to them but they are not new to the bank, they share with you stories from times past when they displayed these qualities in their dealings with your bank. (Of course, see if you can verify this if it sounds unbelievable).

Being honest is not enough to get the loan. But being (or appearing to be) dishonest is enough to kill the deal.

How else have you detected dishonesty on the part of your borrowers. Tell us a story!

"Happy Talk" about today's economy...need a lift?

Thu, 01 Oct 2009 09:06:23 -0800

In the September 2009 edition of his economic newsletter, Tea Leaf, Jeff Thredgold shares a lot of good news.
In fact, over 40 bullet points of things to celebrate from 2008 and 2009 covering the gamet from crime reduction, health improvement, productivity, charitable giving...the works!

Read the list and I promise you'll be feeling better by the end.

One of my favorites:
• Men's contribution to housework has doubled over the past 40 years, while their time spent on child care has tripled

My inner skeptic immediately wondered how much they were helping in 1969. Does doubling that much amount to much? Sorry, guys, just wondering. '-)

BTW...Jeff is one of the two economists I follow regularly. Plain talk. Makes sense.

So, what is your good news!

No-risk, low-cost way to bring my training to you....

Sat, 26 Sep 2009 10:57:12 -0800

Bernanke and Obama may say the economy is in recovery, but your travel (and possibly your training) budget is still in critical care.

If you or your lenders are traveling over an hour to get to my sessions, or my schedule programs are not at a good time, I can come to you!

One lender may be all it takes...

With our 'local option' I have no marketing or meeting space costs so I can confirm our two-day tax return analysis training and/or our one-day financial statement analysis training with as few as 5 confirmed attendees from any combination of banks, credit unions, mortgage companies or other creditors in your area.

Just one lender from your company may be all we are looking for. And if you have 5, it is a go!

Here is how it works:

Call 360 455 1569 or email Kimberly@LindaKeithCPA.com and let us know how many lenders you would like to send if we come to you and the dates work.
We'll follow up and between our contacts and yours we'll find that first five to get it on our schedule.
Once we are over five paid, the bank or credit union that provides us the meeting space gets one complimentary registration.
We offer a discount if your RMA or CU League chapter helps your members by putting the word out.

We are actively working on a 'local' for Eugene, OR and Santa Rosa, CA. And we have feelers out for San Luis Obispo/Santa Barbara and Bakersfield/Fresno.

If you are staying overnight to attend this training, we should be coming to you, don't you think?

Benefits:

Get more from your training dollars
Keep your lenders home
Schedule training according to your calendar, not mine
Get ready for the tougher lending environment as the worst of the recession years come into your analysis

When?

My calendar has room for two locals each month through December. Then things start getting busy!

Call or email Kimberly to see if there are already inquiries about your area or to get the ball rolling.