Small-Business Credit Markets, Assessed by a Loan Broker

via

Ami Kassar of MultiFunding and Lisa Iliopoulos, who is expanding her day care center with the help of a loan arranged by MultiFunding.

By ROBB MANDELBAUM

Published: February 9, 2011

Up until summer 2009, Ami Kassar was a nine-to-fiver, working for Advanta, one of the largest providers of credit cards to small business. But then the company went bust, another victim of the credit crisis, and the newly unemployed Mr. Kassar decided to strike out on his own. 

 He formed MultiFunding, a broker that helps arrange loans for small businesses. It was hardly an auspicious time to open any business, but Mr. Kassar’s challenge was particularly daunting: the freeze in small commercial loans was only beginning to thaw. Plus, business loan brokering has been a fairly obscure and even somewhat shadowy field — but one that Mr. Kassar says he believes serves a growing need. 

Running both a start-up and a loan broker, Mr. Kassar has had an unusual perspective on the small-business credit crisis. Based near Philadelphia, MultiFunding, which observed its first anniversary last week, now employs four people full time and has completed 12 transactions. It is presently helping 120 clients in 23 states secure financing. 

 Mr. Kassar, who works with companies that seek at least $250,000, said that he was able to help from one-third to one-half of his prospective clients. When MultiFunding procures financing, it takes as a fee either a percentage of the financed loan — from 1 to 2.5 percent — or, in the case of a refinancing, two months’ worth of saving over the original debt service. 

Mr. Kassar recently spoke about his business and the market for small-business lending. This is a condensed version of that conversation.

Q. What accounts for MultiFunding’s growth — marketing, or a worsening economic environment for businesses? 
 
A. I think there’s a yearning and crying out for transparency and knowledge and understanding. Most small-business owners are more tradesmen than they are businessmen, and they don’t really understand the finances.

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Pathmark Update

via PW

What Does The A&P Bankruptcy Mean For The Upcoming NoLibs Pathmark?

 

Here’s a little-known fact (at least for those outside grocery store circles): In 2007, the Great Atlantic and Pacific Tea Co. (A&P) acquired Pathmark for $1.4 billion, which included $475 million in debt financing. This came after decades of downsizing and increased competition from an increasingly balkanized grocery-market market (the surge of pseudo natural food stores like Trader Joe’s and Whole Foods for some, cheap all-your-shopping Target and Wal Mart for others) and on Sunday, these factors, combined for the ultimate sad orgy (2-3 years of the Great Recession) found A&P filing for Chapter 11 bankruptcy.

(Note: The answer to the question in the headline is below)

According to APP.com (a news site based out of New Jersey), court papers listed $2.4 billion in assets and $3.2 billion in liabilities for the Jersey-based company. The Inky notes that much of A&P’s woes stem from its 2007 acquisition of Pathmark, which was financed by…wait for it…Lehman Brothers and Bank of America, according to a 2007 Associated Press article.

It’s also noted by a Business Wire press release that in spite of the filing, J.P. Morgan Chase will provide the company with $800 million in financing and the company insists stores are “fully stocked and will remain open.”

That was all before. Moments — seriously, moments! — before this blog was supposed to go up, Bart Blatstein, President of Tower Investments, who owns the property returned our call and assures us all plans for the 2nd and Girard Pathmark are on target. In fact, he says, the Pathmark on Girard is the “flagship for the company, at least as the company sees itself as. Work is continuing, it’s almost done and it’ll be open in a couple months.”

The Pathmark in NoLibs will be a ‘higher-end’ store, and the company hopes this will mark the beginning of more stores just like it.

The Chapter 11 filing, according to Blatstein, will be used as a reorgnization technique so the company can unload what could be referred to as its toxic assets, aka, locations acquired in the 2007 deal that actually hurt A&P’s overall company profits. “It’s ironic,” says Blatstein, “because Pathmark and A&P  will emerge as a much stronger company…They’re getting rid of their old baggage so the company can reemerge stronger and with a better direction.”

(Answer to the headline: Basically nothing.)

Image: Tower Development

 

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Blood Drive at Hyperion Bank, Monday

Real Blood Donors
Save Real Lives

Winter is a difficult time for blood collection, with holidays and the inclement weather of the winter months. There is no substitute for blood - it takes real donors to provide blood for those in need. Please consider making a blood donation. There's someone in need who will be glad you did.

Dear donor,

I am writing to remind you that there are still appointments available for the American Red Cross blood drive being held on Monday,February 14, 2011 at Hyperion Bank from 09:00 AM - 03:00 PM (Sponsor Code: 14826).
Please click here to view available times and to schedule your donation appointment. Walk ins are welcomed!

Thank you for your support and bring a friend, co-worker or family member with you to the drive on Monday!

Suzanne Salsbury-Mooney
(215) 789-4198 

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