Construction Spending is Booming in New York Amid Certain Challenges

17:50 12 September in Blog

Despite the recent surge in construction spending in New York, recent reports indicate the number of permits issued are down compared with prior years. The building congress which promotes the construction industry in New York estimates that while construction spending will increase this year, only 20,000 residential units will be created. This number represents a mere 9% increase in the total number of units built since 2013; this figure is still relatively low since more than 30,000 units were constructed annually during the period between 2005 and 2008.


Although some might see this uptick in residential development spending as a major step in the right direction, others believe there are still some significant challenges which need to be overcome. Particularly in the area of affordable housing. Mayor Bill de Blasio has been pushing for more affordable housing, however experts point to certain challenges including, high cost of land, rezoning issues, and city bureaucracy which makes it difficult for developers to build anything other than luxury condominiums.

 According to Richard Anderson, president of the Building Congress, “While the luxury residential market is booming in Manhattan and in parts of Brooklyn and Queens, we have our work cut out for us in terms of achieving Mayor de Blasio’s plan to create or preserve 200,000 units of affordable housing over the next decade.”


 The good news coming out of all of this is that the number of jobs created as a result of this surge in construction spending. Experts estimate construction jobs to reach 122,700 in 2014. With construction jobs slated to increase this year, the need for invoice factoring by contractors, sub-contractors, and construction companies has never been greater. It is common knowledge that in the construction industry, customers are slow to pay and contractors, sub-contractors, and construction companies for their work. Now these individuals and companies can get immediate cash for their invoices.


 With Capstone Capital Group, LLC’s single invoice factoring program, we can help you move on to the next phase of your project right away, or you can even take on new projects without worrying about additional working capital requirements.


 We have been helping small to mid-sized businesses for years obtain the necessary working capital they need to sustain and grow during uncertain economic times without all the red tape you normally get from most banks. Capstone Capital Group, LLC specializes in Single Invoice Factoring (“Spot Factoring”) for firms in need of immediate cash. Spot Factoring provides flexible, no contract invoice selling in exchange for working capital from Capstone Capital Group.

 To learn more what we can do for our and your business, visit us on the web at www.capstonetrade.com, or give us a call today at (212) 755-3636.

Unintended Consequences Feared For New Rule on Loan Losses

19:35 28 August in Blog
Obviously, no bank could stay in business for very long if it lost money on every loan it made. Yet, new accounting rules set by the International Standards Accounting Board would force banks to post losses every time they grant someone a loan on the theory that a certain percentage of loans ultimately go bad. Critics are arguing that such measures are unnecessary and may have the unintended consequence of reducing the number of loans that banks make.


Less Transparency

Critics fear that if banks have to post every new loan as a potential loss, then banks that are having a bad quarter will simply cancel or postpone loans they might otherwise make in order to avoid negative perception. Some banks might do so even in a strong quarter simply to increase the appearance of profitability. The result might be less trustworthy reports and lower transparency in lending. Ironically, profits would look higher, but long term economic growth would be hurt by less available financing. This could be especially harmful during an economic downturn.
 
Effective in 2018 

These new accounting rules would affect over a hundred countries, but would not take effect until 2018. The need for the new loan loss rule was considered necessary due to the financial crisis of 2007-2008, in which banks were criticized for failing to recognize loans that were going bad earlier, thereby making it impossible for investors to protect themselves from bad lending policies.

Mixed Results 

Treating every loan as a potential loss at the outset makes that kind of fiscal blindness impossible. However, it also makes granting each new loan a threat to a bank’s bottom line, at least on paper and in the short term. The fear is that this will result in delaying or denying loans in order produce artificial profits on paper. 

Alternative Proposals

Some members of the Accounting Standards Board are suggesting alternative rules, such as a rule that would force a portion of the interest earned on each loan to be held in reserve in case the loan goes bad. This would accomplish the same goal of getting banks to keep more in reserve to cover their losses, but without creating incentives to deny loans or manipulate the books by strategic delays. It will be interesting to see if that or other alternatives to the currently planned loan loss rule are successfully introduced between now and 2018. 

Alternative Funding Sources
 
While government continues to restrict growth in the banking sector by making loans less available to borrowers, there are options.  Capstone Capital Group, LLC has been helping small to mid-sized businesses for years obtain the necessary working capital they need to sustain and grow during uncertain economic times without all the red tape you normally get from most banks.  Capstone Capital Group, LLC specializes in Purchase order factoringSingle Invoice Factoring (“Spot Factoring”) for firms in need of immediate cash. Spot Factoring provides flexible, no contract invoice selling in exchange for working capital from Capstone Capital Group.  

Recovery is Slow for Small Business Lending

17:46 21 August in Blog
While the economy slogs along at a snail’s pace and businesses of all sizes continue to persevere, banks remain steadfast in reigning back loans for small businesses.  Even though loans to small businesses were up 1% from last September, they are still 18% less than what they were in 2008 according to the Federal Deposit Insurance Corporation.
 
Traditionally, small businesses were able to obtain necessary working capital loans through small local banks.  For decades, local business owners sat down with bank executives and built relationships that were beneficial for both the bank and the business.  However, since the housing bust in 2007 which caused numerous bank failures, many of the surviving banks have changed their underwriting practices and have literally converted loan approvals into a checklist. Relationship lending is virtually gone now and small business owners have had to consider alternate forms of financing to maintain their livelihood. 
 
Some business owners have tapped into their savings or retirement plans, mortgaged their homes, asked money from family and friends, and some have even turned to high cost, short term loans to keep their entrepreneurial hopes alive for just a little bit longer.  While a majority of these borrowers have good credit and more than two years history of being in business, local bank failures over the past few years and the Dodd Frank to big to fail bank legislation have caused the remaining banks to shy away from small business funding.  Instead of developing the necessary expertise to handle small businesses accounts, they instead choose to penalize small businesses by showing them the door.
 
Although some small business owners have found it difficult to obtain the necessary capital they need to maintain and grow their businesses from their local bank, options do exist.  Fortunately, Capstone Capital Group, LLC has the solution. 
 
Capstone Capital Group, LLC has been helping small to mid-sized businesses for years obtain the necessary working capital they need to sustain and grow during uncertain economic times without all the red tape you normally get a bank.  Capstone Capital Group, LLC specializes in Single Invoice Factoring (“Spot Factoring”) for firms in need of immediate cash. Spot Factoring provides flexible, no contract invoice selling in exchange for working capital from Capstone Capital Group. Call Capstone at (212) 755-3636 and speak with a representative today.

Regulators Remain Unconvinced of Big Bank’s Ability to Safely Wind Down in a Financial Crisis

19:14 15 August in Blog
 As part of the 2010 Dodd-Frank regulatory scheme, banks are required to submit an annual “living will” detailing, among other things, the bank’s operations and exposures, in addition to a plan of how the bank could be dismantled without relying on tax payer funded support in the event they reach a point of potential failure during a financial crisis.
 
After a review by the Federal Reserve (the Feds) and the Federal Deposit Insurance Corporation (FDIC) of recently submitted bankruptcy plans of eleven of the nation’s largest banking institutions, the Feds and the FDIC chastised the plans as being “unrealistic or inadequately supported” and that the plans “fail to make, or even identify the kinds of changes in firm structure and practices that would be necessary to enhance the prospect for an orderly failure.”
 
Regulators set a time frame for these banks to address the apparent deficiencies in their plans by July 2015 or face tougher capital requirements, growth restrictions, and even go so far as to break up the bank if they are unable to make significant progress. 
In order to avoid harsher rules and possible dismantling, regulators say banks can take steps to make their bankruptcy plans by establishing a rational and less complex legal structure, essentially showing they can quickly produce reliable information about their exposures, and amending derivatives contracts to make them easier to bring through bankruptcy. 
 
These actions by regulators gives a clear sign they believe that banks aren’t doing enough to insulate themselves and protect the tax payer in the event of a future financial crisis. With increased regulation and scrutiny looming over the banking industry, which isn’t likely to ease up any time soon, banks are feeling the pressure to restrain growth by curbing lending practices.
 
 Some borrowers, like small business owners, may have a more difficult time obtaining the necessary financing they need to maintain and grow their business.  Unfortunately, the focus on unwinding banks and compliance with regulations takes away resources that can be used to help finance small businesses.  Capstone Capital Group, LLC has funding solutions that can get you the financing the big banks can’t provide. 
Capstone Capital Group, LLC has been helping small to mid-sized businesses for years obtain the necessary working capital they need to sustain and grow during uncertain economic times without all the red tape you normally get from most banks.  Capstone Capital Group, LLC specializes in Business finding solutions, Single Invoice Factoring (“Spot Factoring”) for firms in need of immediate cash. Spot Factoring provides flexible, no contract invoice selling in exchange for working capital from Capstone Capital Group.

 

Pulling Back the Reigns of Growth – Small Banks Restrain Progress Fearing Costly Regulations

14:55 08 August in Blog
Banks have come under intense scrutiny in recent years following the financial crisis that began in 2007.  The regulatory pressure doesn’t seem to be letting up anytime soon as regulators attempt to reign in banks designated as “systemically important.”  
 
According to regulators, systemically important banks are those which report assets of more than $50 billion on average for four quarters in a row.  Once a bank has achieved this status, banks are required to comply with, among other things, stringent capital requirements, submit to yearly “stress tests” and to create processes for the winding down of a bank in the event of a crisis.
 
The purpose of placing a $50 billion asset threshold amount, according to regulators, is to keep a closer eye on banks whose potential problems could endanger the broader financial system.  However, some critics within the banking industry argue the threshold is too low and that banks who come close to that amount are far from “financial giants”.  This issue has caught the eye of Federal Reserve governor Daniel Tarullo, who stated in a speech that it might make more sense to increase the threshold from $50 billion to $100 billion for applying certain rules.  The suggestion being that the “stress test” process seems unnecessary for banks under $100 billion. 
 
As a consequence of these stringent and costly regulatory requirements, some small asset banks like New York Community Bank (NYCB), whose reported assets in the first quarter of 2014 was $47.6 billion, has come out with a statement that it is restraining its lending growth citing loans amount to assets.  If other small banks, like NYCB, who are coming up to the $50 billion threshold limit decide to take a similar approach and restrain growth by curbing its lending practices, some borrowers, like small business owners, may have a more difficult time obtaining the necessary financing they need to maintain and grow their business.  Fortunately, Capstone Capital Group, LLC has the solution. 
 
Capstone Capital Group, LLC has been helping small to mid-sized businesses for years obtain the necessary working capital they need to sustain and grow during uncertain economic times without all the red tape you normally get from most banks.  Capstone Capital Group, LLC specializes in Purchase Order factoring, Single Invoice Factoring (“Spot Factoring”) for firms in need of immediate cash. Spot Factoring provides flexible, no contract invoice selling in exchange for working capital from Capstone Capital Group.  

5 Items to Look Out for When the GDP is Announced

20:28 31 July in Blog
The Bureau of Economic Analysis released an advanced estimate of the United States GDP for the second quarter earlier today. After what many would have designated as a weak first quarter, the US economy gained some momentum in the second quarter and came in stronger than anticipated. The report showed the GDP increasing at a rate of 4%, respectively to a 2.1% decline in the first quarter.
Today’s announcement has a substantial impact on nearly everyone within the US economy. However, is just knowing the numbers really enough? There are certain thoughts that should be placed into question when the GDP is announced. After all, this is an assessment that is used as an indicator of our standard of living. Below we offer five items to look for when the GDP is announced:

Top GDP Stats to Look for

  1. The offset of the loss in GDP in the first quarter with second quarter growth. During the first quarter of 2014 GDP declined by 2.9%. During the second quarter of 2014, the GDP was forecasted to grow by 3%. However in an advanced estimate that was released today, it showed the GDP actually increased by 4% These two quarters essential have left the economy flat for the first six months of 2014.
  1. What are consumers up to? Discretionary purchases and household spending represent about two thirds of the economy.  Depending on consumer sentiment could foreshadow increases in demand which was necessary because the first quarter of 2014 demand increased by 1%.  The government blamed the lack of consumer confidence on the “Polar Vortex” or bad weather.
  1. Business inventories; how high or low are they? In the first quarter they rose by 1.7% which means goods were not being shipped.  Unless this trend has been reversed it could spell trouble for business sales and consumer confidence.
  1. Will the Government revise their numbers? Should the government increase the negative growth percentage for the first quarter of 2014 it could have negative implications for the balance of 2014.  If the revise it in a positive manner it will yield positive results for growth for the balance of the year.
  1. If GDP increases beyond the forecast of 3% then there is a chance that business confidence has increased as well.  This translates into higher production rates and hopefully increased sales and employment.
After a negative first quarter, the GDP rebounded back at an annual growth rate of 4% due to an increase in household spending and business inventories. At Capstone Capital Group, LLC we feel as if this growth may blossom into other opportunities. Capstone is a factoring company here to help your new business start, grow, and thrive. We pride ourselves as a factor whose objective is to help you succeed. We offer single invoice factoring which can provide you with the capital you need to accelerate your cash flow and help your business continue to grow and thrive in today’s market.
For more information on how Capstone can help, please email [email protected] or call (212) 755-3636 to speak with a representative today.

 

Money Makes the World Go Round: How technology & globalization will change the face of banking in the future

21:01 24 July in Blog
Technology has always had a way of dramatically changing an industry.  The banking industry is no exception.  According to experts, technology, globalization and demographics will be the catalyst that will drive changes in banking over the next 100 years. 
 
Competition in Consumer Banking
Traditional consumer banking will come under intense pressure in the future as insurance companies, pension and hedge funds enter the market place offering such products as online savings vehicles, crowd funding and loan syndications. 
 
Mobile Banking Technology
Experts believe that as mobile banking technology continues to advance, brick and mortar bank branches will become obsolete.  Of the 97,000 bank branches that exist across the U.S today, only a small percentage will actually remain, and may function more like a social gather place where people go to learn about personal finance. 
 
Global Regulation
As technology drives economic interconnectedness among nations, banking regulations will ultimately become more global rather than national in scope.
 
Financial Threat Reduction and Future of Physical Currency 
Large data-applications will dramatically enhance the ability of large banking institutions by reducing losses caused by identity theft and financial fraud.  Additionally, suspicious transfers of large sums of money can be detected in real time with the advent of these powerful tools.  Notwithstanding, cyber criminals will nevertheless find ways to game the system which will pave the way for deposit insurance like entities extending beyond traditional banks which will include theft coverage.
 
Physical currency, like checks and coins will likewise cease to exist in a technology based, global banking system.  As people continue to use hand held mobile devices to conduct banking and other merchant transactions using secure biometrics, the need for physical currency will cease to exist.  Paper currency however will continue to play a small role in global economic society as some merchants may stubbornly adopt a cash-only policy for their own personal reasons.
 
Increased Interest in Financial Services
In the future, Asset Management will play a significant role in the financial services industry.  This will happen due to a shift in global demographics changing our aging populous from consumers to savers.   Nowhere will this be more evident than in the growing middle class sector.
 
The middle class will seek out investment opportunities and will seek out professional advice from financial experts. They will value human relations with financial advisers despite technology. Capstone Capital Group, LLC (“Capstone”) also values human relationships.  They too provide professional and expert advice to small and midsized businesses by offering various commercial financing and options.  Capstone specializes in Single Invoice Factoring (“Spot Factoring”) for firms in need of immediate cash. Spot Factoring provides flexible, no contract invoice selling in exchange for working capital from Capstone Capital Group.  Give us a call today at (212) 755-3636 to find out how we can help you.  

Banks Ease Lending Standards Regardless of Regulations

21:31 17 July in Blog
In a recent report issued by the Office of the Comptroller of the Currency (OCC), certain areas of concern were highlighted which identified where banks took on more risk in pursuit of profits: high-yield loans issued to more speculative borrowers and indirect auto loans issued by banks to through car dealerships.  Similarly, banks are also easing lending standards on commercial loans.  

With demand for financing still at an all-time high, a finite pool of lending opportunities, low interest rates, intense competition, slow growth and increased governmental regulation, banks are feeling the pressure to increase revenue in today’s current economic climate. According to the report, the increased risk taking comes as banks continue struggling to generate strong profits in the aftermath of the 2008 financial crisis. The industry’s overall net income set a record in 2013, rising 12% from a year earlier to almost $108 billion.  The previous record was in 2006, and the fact it took the industry seven years to top that reflects “the weak nature of the banking recovery so far”.

Current regulation, brought about by the Dodd-Frank legislation, which capped the amount of commissions and fees banks can charge for originating loans have seemed to create a scenario where banks are now taking on higher risk loans in order to compete and make a profit in this new era of extreme banking regulations.  It is clear that if congress had truly understood the marketplace, they would not have produced the income problems which Dodd-Frank has unfortunately created.

 

Capstone Capital Group, LLC understands the concerns of commercial borrowers who are considering bank financing.  Accordingly, we offer various business finance options, including “Single Invoice Factoring” which functions as a safer alternative to traditional, and often times unpredictable, bank financing.  Spot Factoring provides flexible, no contract invoice selling in exchange for working capital from Capstone Capital Group.

 

Give us a call today to find out how we can help you.  Our underwriting guidelines are simple, straightforward and not subject to stringent regulatory oversight and control. Capstone Capital Group, LLC specializes in Single Invoice Factoring (“Spot Factoring”) for firms in need of immediate cash. Call Capstone at (212) 755-3636 or email [email protected] today and speak with a representative.


[1]Lenders Are Warned on Risk-Regulator Urges Caution by Banks About Standards Amid Competition, By Victoria McGrane And Gillian Tan

Keeping up the Pace: Embracing changes in technology in order to stay relevant in a digital marketplace

19:55 10 July in Blog
Is your company keeping pace with new innovation and technology?  If the answer is no, it is likely your company will not last very long.  In order to survive in a digital society, companies must embrace and keep pace with changes in innovation and technology.  According to some experts, keeping pace with change means testing new ideas and building new businesses within your organizations, as well as being aware that all media is social. 
 
Investing in IT and technology infrastructure, in addition to marketing expansion and new ventures is key to a company’s growth during uncertain economic times.  According to Futurist Jim Carroll, the top 10% of companies who survived and thrived during the “Great Recession” of 2007-2009, did so by specifically deciding to make bold moves to invest in world-class innovation, despite economic uncertainty. 
 
Soraya Darabi, Co-Founder of Zady and Social Entrepreneur gives five reasons why a company should embrace new media and technology.  The first reason is that understanding innovation as it evolves keeps your company relevant.  Darabi adds that not understanding innovation as it evolves makes your company irrelevant.  Next, Darabi states that by embracing new media and technology, companies create positive brand awareness.  Additionally, a company that evolves technologically will have a better ability to reach new audiences and new demographics.  There is also an opportunity for companies to generate additional revenue by utilizing smartphone app technology. 
 
As you can see, by investing in technology and new media, a company will have the ability to remain nimble, grow and ultimately succeed in a digital economic climate that shows no signs of slowing down. 
 
Capstone Capital Group, LLC wants to help your business succeed by getting you the investment capital you need to help your business grow and continue to stay relevant.  Capstone Capital Group, LLC specializes in Single Invoice Factoring (“Spot Factoring”), purchase order factoring for firms in need of immediate cash. Spot Factoring provides flexible, no contract invoice selling in exchange for working capital from Capstone Capital Group.

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