Crains New York - April 8, 2013 - (Page 13)

BANKING REPORT INSIDE The Lists NY area’s largest commercial banks and the region’s biggest thrifts PAGES 15 AND 16 The Scoop Commercial and industrial loans jump sharply at biggest banks PAGE 14 Putting your accounts in hock Lending against receivables no longer just a garmento thing BY HILARY JOHNSON Small-business loan approval rates at big banks, those with $10 billion and more in assets, rose to 15.9% in February, up from 15.3% in January. The February rate was 35% higher than it was a year earlier, according to an analysis of loan applications by Biz2Credit.com. Banks still have a long way to go. Loans remain a smaller percentage of their balance sheets, at about 61%, than they were three years ago, according to an analysis by SNL Financial. Cash and low-yielding securities constitute a larger portion of assets Asset-based lenders specializing in receivables financing and factoring gained prominence during the financial crisis and recession. They’re fighting to keep it that way. As the economy improves and big banks seek to increase lending, they’re moving back into the territory of such New York-based specialty lenders as CIT, Rosenthal & Rosenthal and Sterling National Bank, cherry-picking the most creditworthy customers. “Banks are aggressive, and we assetbased lenders MONTHLY RATE are feeling the ON MONEY pressure,” said extended in return Gerald for accounts receivable turned Joseph, presiover to “factors” dent of Gerfor collection ber Finance Inc., another New Yorkbased lender. MAXIMUM Gerber, which ANNUAL RATE on bank loans has $70 milcollateralized by lion in loans, receivables recently lost a customer or two to banks, Mr. Joseph noted. In New York City, borrowers can choose from a full spectrum of asset-based lenders offering receivables lending and factoring. Some of the biggest, like CIT, have many hundreds of customers and provide tens of billions of dollars in loans; others, like Gerber, count about 30 to 40 customers. The situation all these lenders are facing, however, is the same. It’s the reverse of what happened during the financial crisis. Then, asset-based lenders moved “upstream,” gaining more stable customers who had been dropped by banks. At Rosenthal & Rosenthal, See BORROWER on Page 14 See HOCKING on Page 17 STATS 3% BETTER PROSPECTS: TygaBox Systems CEO Nadine Cino’s new loan makes for brighter days. buck ennis 14% A borrower again be? Banks are back to lending to businesses, and their terms are surprisingly favorable BY HILARY JOHNSON What a difference four years makes. The banks that rejected Ari Zoldan when he started Quantum Networks, a wireless equipment distributor, are now clamoring to lend to him, especially as his Times Square-based com- pany will likely double revenue this year to $22 million. “The banks are all coming back to us,” Mr. Zoldan said. “They’re offering really competitive rates to get our business.” The situation is somewhat bittersweet, he added, since he had to turn to American Express for the credit he needed in the lean years. Mr. Zoldan hasn’t bitten on a bank loan yet, though he’s thinking about using the easier money to order more inventory and to hire. All over New York, banks are getting back into the business of lending. 5.7% INCREASE IN THE AMOUNT of all loans and leases by commercial banks in 2012 over 2011 3.9% INCREASE by thrifts Source: SNL Financial April 8, 2013 | Crain’s New York Business | 13 http://www.Biz2Credit.com

Table of Contents for the Digital Edition of Crains New York - April 8, 2013

IN THE BOROUGHS
IN THE MARKETS
THE INSIDER
BUSINESS PEOPLE
SMALL BUSINESS
OPINION
GREG DAVID
REPORT: BANKING
THE LISTS
FOR THE RECORD
CLASSIFIEDS
REAL ESTATE DEALS
NEW YORK, NEW YORK
SOURCE LUNCH
OUT AND ABOUT
SNAPS

Crains New York - April 8, 2013