CI Premium: An Integrator’s Guide to Lending and Financing

Although the lending environment has improved, integrators are still struggling to find sources to give them money, and that could lead to more consolidation.

There’s some good news for anyone seeking a loan: Banks are showing new signs of vigor after a long period of infirmity following the financial meltdown of 2008.

“Bank profits are up, and most have paid back the money they received under the federal Troubled Assets Relief Program (TARP),” says Bill McDermott, CEO of Atlanta-based McDermott Financial Solutions.

Many small businesses, spurred by improving economic conditions, are starting to gear up for the kind of aggressive growth that requires outside financing.

“Business owners are starting to spread their wings,” says John McQuaig, managing partner of McQuaig & Welk, a Wenatchee, Wash.,-based management consulting firm. “There is more demand for expansion and equipment loans than there has been at any time since the Great Recession.”

As with most good news, there is of course a caveat here: While lending in general may be up, that’s not necessarily the case for contractors as a whole, among which we group commercial integrators.

“It’s much easier today to get existing lenders to continue lending money than it is to find new ones,” says Alex Calderone, managing director at Calderone Advisory Group LLC of Birmingham, Mich. “A number of banks are very risk-averse today. They’re looking at more than just cash flow. They want to see assets and they’re asking for personal collateral on some of these loans,” he says.

Log in to continue reading.