By Bob Nieman | Jun 08, 2011
Are we still in a recession? Or is the economic downturn over? For the most part, it depends on who you talk to.
However, one thing is certain – when it comes to financing, the rules of the game have definitely changed. As a result, the Coin Laundry Association enlisted a panel of laundry financing experts to go over some of those new guidelines at Wednesday morning’s educational seminar at Clean 2011 in Las Vegas, which was moderated by CLA President and CEO Brian Wallace.
The panel included: Jim Freeze, Dexter Financial Services; Brian Grell, Eastern Funding; Chris Michalek, U.S. Capital Corp.; John Sabino, Laundrylux Financial Services; and Jennifer Whitney, Alliance Laundry Systems.
What are those “new rules?”
Lenders are getting back to basics, with no shortcuts, the panel agreed.
“The picture needs to be painted in the most honest position,” Michalek said. “The excuses are gone. Banks want to see an engaged investor.”
“We’re looking for transparency,” Whitney said. “We want as much information as you can give us – to get the deal done.”
Sabino added that his company is now focusing heavily on the value of the collateral, as well as spending more time looking at real estate values, versus mortgage values.
Regarding the “credit crunch,” Grell said there is plenty of funding available, while Freeze added that his experience never really indicated a credit crunch in our industry.
“Credit availability is there,” Sabino offered. “We’re not feeling a credit crunch.”
As far as getting approved for that financing, all of the panelists agreed that it’s a combination of credit score, down payment, net worth and industry experience.
“Experience helps,” Grell said. “It’s a big factor. The second and third stores are always easier to finance.”
For Sabino, there is “no magic rule.” It’s a combination of all four factors, tailoring the right package for the specific investor.
However, all concurred that documentation is key to the process. Potential investors were urged to maintain detailed revenue records.
When asked to describe the “model applicant,” Freeze said it would be some who is open and forthright during the entire process.
“Sell us on your business, and do your homework,” he added.
Whitney added that the successful applicant will be able to explain how they will make their store a success.
“Enthusiasm and passion for the business is huge,” Grell concluded.