Business Briefing

By Tom Lynn, SVP, Senior Group Manager, First Bank Commercial Real Estate Originally published in the San Francisco Business Times Since there are so many variables in commercial real estate (CRE) lending, not all transactions fit all lenders. This raises many questions for investors and developers who are seeking financing. As a trusted advisor, some common questions asked by many borrowers are: When seeking a commercial real estate loan, what’s your typical deal size? Deal sizes are dependent on the size and risk tolerance(s) of the lender. For example, at First Bank, the size of loans generally don’t exceed $15MM, although exceptions can be made. • What types of properties do you finance? Most real estate investors and developers want to purchase properties like office buildings, industrial properties, retail space, residential developments, and storage buildings. Often, lenders will also provide financing for specialty niches like churches and senior care facilities. Alt ...

Family-owned businesses in the United States are as common as hometown parades and pumpkin pie on Thanksgiving. Family-owned businesses, like the one where I work, represent 80-90% of all businesses, and generate between 40-60% of Gross Domestic Product (GDP). We exist in all shapes and sizes, from small corner stores to huge companies, with over $100 billion in revenue. We also face common opportunities and challenges that are different from publicly-traded companies, such as managing intra-family conflict, shareholder control, distributions, and engaging the next generation. Yet, despite our ubiquity and common opportunities and challenges, far too many of us treat the issues we face as family-owned businesses as if we’re the only ones to confront those issues. Our isolation in addressing these challenges is reinforced by the lack of well-known resources regarding these topics. Many of you might be able to name several good books about how to be a great leader, but how many can name a good book ...

By Bill Nethercott, SVP/Senior Group Manager Originally published in the LA Business Journal Surrounding myself with the best has always been a strategy I have executed. This not only applies to my professional life, but it also applies equally to my “giving back” philosophy. Thus, I’ve been actively involved with several non-profit groups throughout my career. In doing so, I’ve seen this philosophy payoff in so many ways. During my 35-years of commercial banking, I’ve held numerous leadership and board of director positions with local, national, and international non-profit groups, such as Lions Clubs International (Past President-San Ramon Lions Club) and Rotary International (Past President-San Ramon Rotary Club), as well as Boys & Girls Club of America (Board Chair-Boys & Girls Club of the West Valley). All groups are commonly focused on missions most passionate to me. A short summary on each is as follows: Lions Clubs International, founded in 191 ...

By Lisa Bulaich Originally published in the Sacramento Business Journal In the course of many business owners’ journey to success, they’ll find themselves considering a lease, a purchase, or the refinance of a commercial property. Perhaps the business has outgrown its current space or a second location is needed for expansion, or continuing to pay the rising cost of a lease just doesn’t make good business sense. The motivating factors are many. When these situations occur, business owners often find themselves evaluating new lease arrangements, researching purchase options, or evaluating the details surrounding a refinance. A lease can make sense, however, if the business owner is not quite ready to put down roots. Purchasing a commercial property can be a better option when the business owner is ready. Purchasing enables business owners to reap the benefits of paying themselves rent while purchasing an asset, to take advantage of tax write offs, and to create a new revenue str ...

By ANDREW ZINNOriginally published in the Los Angeles Business Journal Insurance may be one of the more complex and overlooked areas in commercial real estate financing. Typically, banks require borrowers to obtain some level of insurance to cover the value of the improvements being financed. Property and liability insurance policies are lengthy and their review is even more monotonous than reading the reams of paper produced by a bank in the form of commercial loan documents. Just like your loan documents, one should pay particular attention to the defined terms and exclusions in an insurance policy. The definitions and exclusions are the key to unlocking the scope of your coverage. One of the key exclusions you’ll find with standard property insurance policies is for pollution. Introduced in 1978, environmental insurance was first developed to fill the insurance coverage gaps created by pollution exclusions in liability and property insurance policies. Because the definition of pollution may be subjective, ...

Frank Tapia, Vice President,Business Banking Originally published in the Long Beach Business Journal Often, savvy business owners need to evaluate if the existing property they’re located in is right for their long-term business needs. This can certainly be the case if the business has recently experienced growth or needs additional locations in order to do so. Since all situations vary, each business owner must determine if renting or owning a commercial property makes sense for them. Although many may realize it’s preferred to purchase a home rather than rent, many may not realize that paying a commercial mortgage can also be more reasonable than renting. In fact, in a recent analysis, it was estimated that it could cost 86.6% more to lease vs. purchase a commercial real estate property over a 15-year occupancy period*. In fact, one of our valued clients, a retail store with the same location for the past seven years, consistently grew each year. Of course, with each passing year, they were outgrowing t ...

By KAREN BROWN SENIOR VICE PRESIDENT, COMMERCIAL TEAM LEADER Originally published in the San Francisco Valley Business Journal Of course, we all know in order to be successful in business, you need to have the right people in place, the right product or service, and the right price. Did you also know it’s essential to have the right strategic banking partnership? Certainly, any bank can open accounts, accept deposits, and generate loans; however, it’s the banking partnership and holistic relationship that truly can have an impact on the long-term success of a business, especially those that are privately-held. In fact, a recent survey* indicated that business owners reported the highest level of satisfaction with client-focused banks and those that are deeply-rooted in the communities in which they serve. Within the survey, 80% chose a client-focused bank over the larger-scale banks (61%) and online lenders (46%). In business, relationships—including the one you have with your ban ...

By Greg Hahn, Commercial Loan Officer, S. California CommercialOriginally published in the Orange County Business Journal Having access to various banking services is essential; however, having a relationship with a dedicated banker could mean a lot more to business owners than expected. Be a business partner. Most commercial banks have dedicated relationship managers that work specifically with business owners. Banking services are evolving regularly, making it difficult to stay updated on what latest services are available. An experienced relationship manager will get to know their business clients’ needs, recommend new products and services to enhance daily operations, making necessary adjustments to meet changing needs. Provide sound advice. A business owner’s relationship manager should periodically be reviewing financial statements, while noticing positive and negative trends that the business is experiencing. This is valuable information as it could potentially help avoid financial prob ...

By John Marder, Senior Vice President, C & I Commercial Lending Originally published in the Orange County Business Journal Recently, I was given a great opportunity to show just what I can do as a relationship manager and what we can do as a bank. The owner of a distribution company I was recently introduced to said, “I liked the guy at the other bank that came out to see me but I gave him my financial package and, after three months, nothing ever happened.” Does this sound familiar? Let me give you a few tips on how to best avoid this scenario if you’re looking for a commercial loan or line of credit for your business, or if you are a trusted advisor helping your client through this process. Don’t just rely on one lender. It is helpful to shop a small, medium, and large bank to see what each has to offer. Realize a good offer can take time, so ask how the process works. You should get a pretty good indication of how the bank will view your company within ...

By MICHAEL DIERBERG, Chairman of the Board, FB Corporation (First Bank) For those of us who live and work in cities, the world around us is the here and now. Everything is new. We work in office buildings that are probably younger than most of the people working in them. The tools we use to do our jobs didn’t exist 10 – 20 years ago. We use things and then discard them. Given our surroundings, it’s not surprising that often our perspective is narrowly focused on what is directly in front of us, or the here and now. Contrast that with the perspective of a farmer. The farmer may live in the same home that his or her grandparents or great-grandparents built. Likewise, the fields and barns have been passed down and tended to by generations before. At night, the farmer has a clear view of the sky as a reminder of a broader picture beyond that day’s activities. All of this leads to several traits that are common in the farming community: appreciation and respect for the contribution of othe ...