The Will to Grow ™

Banks Need to Lend Now

Though there are several reasons our economy that has been struggling, the credit crisis is front and center.  Even after all of the government involvement and various stimulus programs, financial institutions remain ridiculously gun shy.  This is so very frustrating.  We, the tax payers, bailed out the banks but in return the banks have been reluctant to lend to stimulate the market and create “real job growth.”

America is built on credit.  Consumers can’t buy without credit.  Homes don’t get built without credit.  Companies can’t invest and grow without credit.  Without access to capital, real economic growth is limited.  This is the key problem with our economy and why the recovery is slow moving.  Using my firm as a case study, at Axispoint, we recently closed on a new and larger credit facility to help us continue down our growth path.  Even though we have no debt on the balance sheet and a strong historical P&L (earnings), it took months and months to drive to the credit line we were looking for.  Why?  Banks aren’t lending, and if they do lend, they are demanding high fees and operational restrictions.  I have several friends who are CEOs of highly successful companies who say they can’t get additional credit in the market.

This lack of lending is truly hurting our country in a plethora of ways, none of which is more important than job creation.  There is a simple formula that everyone needs to understand: Corporate growth = New and better jobs.  If businesses (whether you are a large Fortune 500 company or the entrepreneur starting his or her new business) do not have access to capital you cannot take your company to the next level and hire employees to help you get there.  I am not advocating that financial institutions lend money to anyone and everyone (that was one of the factors of the recession), but there needs to be a middle ground.  Right now, credit lending remains in a deep freeze.  We need the thaw to occur very soon (i.e., banks need to lend again), so we can grow our businesses at a faster pace and create new and exciting employment opportunities.  Then and only then will we see a true economic recovery. 

2010 - Now Is The Time

Happy New Year Everyone! 

The pundits are predicting all types of economic scenarios for 2010.  My read is that we’re going to see mixed results throughout the year and growth will vary based on sector of the economy.  Overall, I believe we are going to experience a slow recovery and real economic growth with pitfalls and roadblocks along the way.  Every month, the market will feel like we are taking two steps forward but then one step backward.

In 2009, we made significant investments in Axispoint including people (our core asset), processes and systems (we’re about to launch a new website, developing a new ERP system, etc.).  We are continuing to invest in the first half of 2010.  Our objective is to grow and become a stronger firm to best meet our vision of being a trusted technology partner to our clients.  We purposely spent while others retracted not for the sake of spending dollars in a down market, but to position ourselves for success in the future.  Only time will tell if we invested wisely, but the preliminary results of our investments look really promising.  I believe 2010 can be a highly positive year and then 2011 when the economy really begins humming again, we can leapfrog the competition to experience exceptional growth.

I have no doubt that the pitfalls and roadblocks will occur and at times even with smart investments, we will take one step backwards.  The real trick is to be incredibly nimble in these uncertain times and make good business calls to take advantage of the opportunities (and there are a lot of them in this market) and attack the issues head on.  I believe now is a critical time in building and ensuring the long term success of your company by developing and deploying core capabilities, new initiatives, innovative ideas, etc.  Good luck and I wish you true success in 2010!