The Edge for May 2023
Interest rates are up. Credit has tightened. So we asked bank executives in New Jersey to tell us about the current banking climate, and what businesses in the Garden State need to do to get loans and maintain their access to credit. They all agreed that that the ‘credit crunch’ and the ‘banking crisis’ is concerning, but is not a systemic issue for the banking system. They also said that business owners need to be armed with financial documents and a good story when they talk to their bankers and apply for loans. Read what they said below.
Find a Bank that Can Support You in Good Times and Bad Times
There is still a lot of liquidity out there and stronger banks are lending, so I think it’s important that business owners find the right bank that can support them in good times and in bad. A rapid rise in interest rates in such a short period of time, however, has either altered business owners’ growth plans, or the cost of borrowing has become unaffordable and they struggle to meet minimum debt service.
– Robert Curley III, Regional President of Pennsylvania/New Jersey Metro, TD Bank
Understand What Banks are Looking for and Be in Position to Provide It
Loan demand certainly has declined over the last six to nine months. Business owners are either reluctant to invest in themselves or are hoarding cash, or maybe putting more scrutiny on investment opportunities. My advice to those looking to borrow is to talk to your banker. Understand the bank’s lending requirements and be in position to provide it. It starts with quality financial reporting.
– William Ruckert III, Senior Vice President/Senior Relationship Manager, Provident Bank
We Need to Know Your Story and Your Financials
We need to know your story and your financials. If there is some weakness in your credit somewhere, let’s have a discussion about it. Let me know why there is a weakness. If you don’t present that to me, and I find out about it later, I will have a lot of questions. If your company has supply chain issues or labor issues, for example, and we have a good banking relationship with you, we can talk it out and we will continue serving your banking needs.
– John Fitzgerald, President & CEO, Magyar Bank
Don’t Panic. Have an In-Person Conversation with Your Bank
This is not a systemic banking problem. It’s a problem of two or three banks that had specific niches that backfired on them. New Jersey banks are well managed, have great capital, have good credit standards and have good earnings. The point is don’t panic. Go talk to your banks. There is nothing better than having an in-person discussion, and I stress in-person, with your bank and let them know what you company wants to do credit wise in the next couple of months or years. Get on the same page with your banker. It is key to your company’s future.
– Tom Bracken, President and CEO, N.J. Chamber of Commerce. Bracken previously served as president of TriState Capital Bank's New Jersey operation; and President and CEO of Sun Bancorp, Inc.
