Area Seen Blessed With Good Banks
Making the statement was Stuart Kingma, SIOR, an associate with S.J. Wisinksi and Co.
Kingma, who has been with the firm for a decade, was discussing with the Business Journal what he believes to be the ideal commercial lending officer.
“We have a number of very good bankers here, a number of very good lenders,” he said.
“Some of them are with the big banks: the Fifth Thirds, The National Cities, the Standard Federals. But then we also deal with the smaller, more local banks: the Macatawas, the Kent Commerces, the Mercantiles.
“All of them have a niche which they have identified,” Kingma said, “and which they are aggressively servicing. And over the course of a year we’ll see many, if not all of them.”
Basically, he said, when a client approaches him about a proposal, it goes without saying that he wants to be able to direct that client to somebody in banking who is responsive, someone with the capacity to be excited about the client’s vision, and who is creative in his response to it.
He said he isn’t seeking a nursemaid, but he does want someone who has a very good understanding of the client’s industry and who can be an advocate for the client.
“And, beyond that, you also want one who understands the process and the timing of putting a deal together,” Kingma added.
“And I mean that not only in terms of the economics, but also the practical and mechanical side of it. You want someone who has a good working knowledge of all the hoops that a project has to go through.”
He explained that many of the hoops — items such as a well-prepared pro forma (or business plan), an acceptable survey, the clear title and appraisals — are usually boiler plate. They are necessities that must be executed properly, but usually do not become obstacles in and of themselves.
But when a project comes up against a potential environmental obstacle, he said, then is when you need a loan officer who has the benefit of experience.
“Naturally, the banks are cautious about this,” Kingma said. “They don’t want to take back a contaminated site if they can help it.
“But what you’re looking for is a banker with the willingness to work through the issue rather than saying, ‘We’re going to walk away from it.’”
He explained that environmental legislation at first was so strict that many bankers were reluctant to lend on any project that had any kind of potential environmental impact.
Kingma explained, however, that the law has relaxed restrictions to a degree, and understanding of it has worked its way through the banking system.
“We can actually get lending on contaminated sites now,” he said, “provided the proper hoops are gone through.”
He said it’s not a case of bankers circumventing or ignoring the process, but rather working with a clear understanding of it.
“So today,” Kingma said, “the banker is saying, ‘How can we solve the problem on this?’
“Most of them are on board,” he added. “There was a huge change in policy and it takes time to work its way through the system.”
He explained that it’s where a project may seem marginal that a loan officer’s enthusiasm, fostered by the client’s own vision, counts for the most.
“This is when the project goes before the loan committee.
“Now the committee looks at the big picture: the financial capability of the applicant, the financial soundness of the project, the business need based on sales forecasting et cetera, et cetera, and makes a decision to approve or deny.
“Before that is when a mini sales job takes place: the commercial lending officer presenting the client’s case to the committee.
“In some instances,” he said, “the marginal deal may or may not be approved based on the lending officer’s approach and his excitement — and that excitement can be driven in a big way, not only by the lending officer’s clear understanding of the business, but also by the applicant’s vision for that business.”
The key thing, he said, is that he certainly doesn’t want to send a good customer off to someone who is not qualified to carry the ball – or who is not excited.
“There’s a credibility issue there with your clients, and you want them happy, satisfied and taken care of.”