As the commercial loan business seems to be in a state of shock and or a “wait and see” mentality it’s important to keep ones perspective. Yes we have problems that need to be addressed and resolved. There is no doubting that. But are the problem in the commercial loan business really as bad as the media portrays? We think not.
Every 10 to 15 years this country goes through a recession and every time the media over blows it for their own self serving purpose of getting ratings. It’s a selfish model and we as a country pay for their greed. The markets are largely dependent on our collective confidence in the system, and they are attacking that very thing. The world is not coming to an end. The fundamentals are still in place and it won’t be long until this mess is a memory.
For example, it’s estimated that SBA commercial loans are down by 30% year to date. 30% is a lot yes, but what about the other 70%? And down 30% from last year, which was one of the best years ever on record. In addition, the default rates which where the lowest ever in 2007 are up only .08% as of 3rd qtr from year to date.
So is now the time to leave the business? Of course not. Its survival time and time to continue to get better at what you do. It’s all about adapting and becoming more and more efficient. Keeping costs low and working on deals that you know and understand is our strategy. The commercial loan business is not going away. As more and more people leave, the survivors will be in outstanding positions when the market returns to healthier levels.