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Posts Tagged ‘money’


Banks to Increase Lending to Midsize Businesses

October 25th, 2010 ::

By Rieva Lesonsky

Commercial lending to midsize businesses is projected to grow this year, according to data from bond-market advisory firm CreditSights reports CFO.com. After two years of a credit crunch, why are banks now announcing new plans to focus on commercial lending?

The collapse of the housing market is one reason—obviously, banks have lost much of the residential mortgage business that once dominated their portfolios. Second, the passage of the CARD Act, which has restricted banks’ ability to profit from consumer credit cards, has banks looking elsewhere for a way to make money.

Commercial lending, which accounted for as much as 40 percent of banks’ portfolios in 1960, fell to just 15 percent in 2010 as banks relied on consumer credit for much of their business. Now, banks are turning back to commercial loans, which offer them higher margins and terms, says CreditSights, as well as a chance to cross-sell other services to the businesses that borrow.

The Federal Reserve’s July survey of senior loan officers showed that banks were already loosening their standards on many types of commercial loans. Many had also stopped downsizing companies’ existing lines of credit.

Currently, banks are focusing on lending to companies in industries with high growth potential, including health care, technology and energy. But some are focusing on other areas, such as manufacturing. In addition to major banks such as Wells Fargo, U.S. Bancorp and PNC Financial Services, larger regional banks are also getting into the game—so you may want to investigate what’s going on with banks in your area.

Will the change in lending standards be good or bad news for smaller companies? So far, one expert cited by CFO.com says, it’s bad news—banks are becoming more aggressive in their approach to small companies that have outstanding loans or lines of credit and show signs of cash-flow problems or management weaknesses.

If that sounds like your company, you better get your ducks in a row. If it doesn’t describe your business, the change could be good news for you in the long run. With more banks looking to midsize businesses as a way to make money, it could be just a matter of time until the wealth trickles down to smaller firms.

Should You Go to Grad School?

April 29th, 2010 ::

by Patrick Madsen

Image: Andrew Magill's Flickrstream, Creative Commons

I had the opportunity to read through an article posted on Yahoo! Finance’s page the other day titled “Valuing Another Degree”. Interesting article and something that is probably at the forefront of a person’s mind as they consider furthering their education or sticking it out in the workforce. I have to say, this is something that has been discussed by students all through my 10 + years of experience in the career counseling profession. This is not a new concern nor something that the recent economic downturn has caused to surface.

Here are my thoughts on the decision of furthering your education or staying in the workforce:

  • Are you satisfied with your current career path? Most students would say “no” and that the previous education they went for did not pan out like they thought. A graduate degree provides a person with a more specified set of skills, experience, and knowledge that not everyone in the marketplace may have. It is an opportunity to say, “Hey, employer, this is what makes me better than that person over there” or “this is the value that I offer your company to affect your bottom line”.
  • Did you learn the skills that you need to effectively operate in the workforce? Many employers would say you didn’t. Often times, an undergraduate degree is meant to provide you with an overall education, i.e., you get a little history, social sciences, math, composition, and other transferrable knowledge, but with a few exceptions, you likely didn’t get the specific training needed for a specific industry. Take, for example, a Liberal Arts degrees. I fully believe that students are gaining great experience in research, analysis, and thoughtful discourse, but many times they are not shown how these skills can be marketed to the workforce. So these bright and talented young professionals are stuck having to figure out how to target themselves and prove that they have the skills, experience, and knowledge for many industries. Thus… enter a graduate degree.
  • Don’t assume that a graduate degree alone will give you a higher salary. The concept of a graduate degree, by itself, was never meant to automatically give you a higher salary. Instead, it was meant to provide you an update in knowledge and practice to help you prove you deserve a higher salary. This is a misconception about graduate programs (and MBA programs especially). A vast majority of students entering these programs believe and expect that once they finish someone will just give them a job and a $100,000 salary right after they grab their diploma. FALSE. The graduate degree is something that helps you show your passion and motivation for a particular area. It helps “open the door” so that you can show the employer all the great experience and practice you have had and how you could apply it to their organization. When it comes down to it, an employer will most likely look to see if candidates have the degree, but then quickly go into their experience and skills to see if they can “do the job”. After that, the interview will help them see if you are actually a “motivated and professional person” that can fit in with their organization.
  • What does history say? I do not have statistics on this, but I bet they are out there! When you look at the history of jobs and their requirements you start to see an interesting trend. At one point, a high school diploma was the main driver for entrance into the workforce; many jobs asking for a minimum of such educational completion. Over time, you start to notice that the minimum has grown to a bachelor’s degree being the requirement for most jobs out there. I am beginning to see that a master’s degree will become the new minimum requirement for a majority of jobs. This is just something to think about. See if you can find a similar trend for the industry and job function you are looking to enter.

What do I say to students who have been debating this same question over the past 10 years? Simple. What do you see yourself doing with your life? How do you imagine being a part of society?

I want them to see that life is more than just a “job” that they do to earn money, but something that allows them to show the world “this is who I am”. A career is an opportunity to express your values and add substance to the world around you. Do you need a degree to do this? Not necessarily, but often times it helps you get through that door that society puts up to make sure you are motivated, professional, and proven.

Patrick Madsen, Director of Programs & Education in Career Services at the Johns Hopkins University Carey Business SchoolPatrick Madsen is the Director of Programs & Education in Career Services at the Johns Hopkins University Carey Business School. He manages the Programs & Education curriculum to include career advising services, speaker series, brand management training, and other events to help students prepare themselves for the world of work. His background includes a degree in Psychology from North Carolina State University, a masters degree in Counseling from East Carolina University, and a doctorate in Organizational Leadership/Student Affairs from Nova Southeastern University.