Seminar Helps Point Small Businesses To Capital, Loans
By Thomas Cogan
‘How can you [as a small business] become the kind of customer that banks like Commerce drool over?"
With a question both provocative and rhetorical, Joyce Moy, director of economic development at LaGuardia Community College, launched a seminar on banking and access to capital sponsored by Commerce Bank at a small business breakfast meeting last Friday at Dazies Restaurant in Sunnyside. Several business people who had questions of their own were in attendance. Indeed, a seeming plan whereby the bank and school people would answer the attendees’ inquiries on the spot had to be revised when, as Commerce vice president of government and community banking Jack W. Rainey admitted, the questions proved too sophisticated to be answered immediately and several replies by e-mail were promised. In addition to Moy and Rainey, the chief speakers were Rosa Figueroa, also of LaGuardia; Brian Gurski of Acción New York, a lending institution; and Commerce Bank officials Donna DeMagistris, Peter Frantzis and Francis Burden.
Any business attempting to choose a bank and establish a relationship with it should consider several questions, Moy said. Can we get a good credit line? Can we get available funds swiftly? Can we grow with this bank as our financial resort? are three such questions. Access to banking information is also vital to any business. She said that any business which is constantly worried about financial difficulties should consider that its relationship with its bank might be faulty. Frantzis spoke for his bank and stressed how fee-free it was, to the point where someone asked how Commerce made its money. Rainey said there was money to be made in customer deposits alone, and fees were unnecessary for small businesses, becoming necessary only when the bank is dealing with larger businesses.
Moy guided the meeting with the realization that its general nature could be undermined at any time by getting stuck on particular points of interest in the audience, such as online banking. She was determined to spend a good deal of time on credit reports, and provided all in attendance with information on obtaining them. She also provided an example of one, issuing excerpts of a credit report which was merged from reports by three credit bureaus compiled on a Brooklyn business person near the end of last year. The three credit bureaus are familiar ones: Experian of Allen, Texas; Equifax of Atlanta, Georgia, and Transunion, of Chester, Pennsylvania. The tour through the report revealed that the person in question had a largely responsible credit history but had problems in certain areas; such as revolving credit and the way it was handled. Revolving credit usually has to do with credit cards, and the report indicated the person was paying off debt minimally on several cards, tending to pay back only the smallest amount the creditors would accept. The large number of cards and the pattern of paying back could put that person in a bad light if ever a loan were applied for—a hazard emphasized by Francis Burden, a veteran loan officer of Commerce Bank,
A credit report was something everyone in attendance could respond to, and one who did was Curt Linauer, owner of a dry cleaning store on Greenpoint Avenue in Sunnyside. Linauer complained that a certain debt he paid off nearly a decade ago keeps popping up on his report. Moy said that credit reports should be monitored constantly to spot such inequities. She added that tasks left to one’s attorney or accountant sometimes don’t get completed and thus seemingly settled issues show up as debt or unfinished business. Linauer said that as far as one’s credit report is concerned, one is presumed guilty until proven innocent. As far as constant inquiries, or hits, on one’s credit report, a complaint made by several present, Moy said that a loan application simply makes one open to inquiries.
Gurski of Acción New York said that a healthy credit report maintains a balance between loans and credit cards. He described Acción, a so-called micro-lending organization that lends to those who cannot get bank loans, such as start-ups and enterprises too small for the average bank’s consideration. Burden of Commerce Bank said that he has referred many applicants to Acción upon deciding that the bank could not handle their applications. Gurski said loans can be as small as $500 or as large as $50,000, with interest rates running between 10.9 and 17.9 percent, higher than standard bank rates. Acción also provides business advisory services and a law firm doing pro bono work.
Sponsoring the seminar in addition to LaGuardia and Commerce Bank was Assemblymember Catherine Nolan, chair of the Assembly banking committee in Albany. Former City Council Speaker Peter Vallone, whose current activities include consulting for Commerce Bank, also made an appearance and praised the "little people" who manage the small businesses in the city.