Getting a sick feeling happens to often in Canadian business under all sorts of circumstances .We go that sick feeling the other day when reading Barry Critchley's column in the FINANCIAL POST .
We've included a link to that article below
We're strong fans of Critchley's regular columns which often seems to cover some of the underbelly of whats happening in Canadian business.. good and bad .
Anyway, the gist of the article. It takes us back to circa 2008.. think back to that time in business, as the world basically ended when it came to worldwide economic implosion , bank failures, commercial financing failures , and oh yes.. have we forgotten anything .. yes .. our RRSP took 40-50% hits forcing us to spend the last 7 years crawling back to breakeven.
Enter the government in the form of JIM FLAHERTY setting up the ' emergency ' ( key word = emergency ) 12 Billion ( that's billion with a B ) CANADIAN SECURITIZATION AND LOAN FACILITY .
Our reaction at the time . We were overjoyed .. It was a classic ' I'm from the government and here to help '.
As our business was, and still is financing origination for Canadian business we recall vividly banks stopping lending, commercial mortgages drying up, lease companies having their credit facilities stopped, and commercial finance companies exiting industries or simply closing down. Bottom line , it was ugly .
So here was the Canadian government coming in to also help out clients .
So, back to Mr Critchleys article . What did the government do with that 12 Billion . Did they lend it to the thousands of firms that saw their credit line facilities disappear, or find that their access to capital simply: GONE .
They didnt. Instead they appointed the BDC who did a handful of loans in the several hundred million dollar range to companies such as GMAC/GM Nissan, and CNH INDUSTRIAL . Apparently about 5 loans in total, all to companies that had revenues in the hundreds of millions or billions. CNH we believe is a Dutch company, so surely we all see the wisdom of helping a DUTCH subsidiary company as the world around us implodes? Who wouldn't buy into that?
Naturally that left our clients in the dust , with many companies failing, restructuring, having to merge, etc, etc
And the BDC /GOVERNMENT take? ' We consider the program a great success ' said Paula Cruickshank.
Who doesn't love a braggart in Business. We all do, don't we?????
The essence of Critchely's article was that the program made back all its money, and then some in profit based on those five loans.
It's easy to get sick on many aspects of Canadian business . This was an all time low and we say ' shame' on the government and BDC for bragging about making those 5 loans to the likes of GM, NISSAN, and some other misc. asset backed securities deals . So while the EMPEROR marched up BAY STREET touting loans for Canadian business in 2008 we offer that THE EMPEROR IN FACT HAD NO NEW CLOTHES,
We work on Main street everyday, not Bay Street and we hope someday , one day that the little guy will get the consideration he or she deserves without having to watch the action at the trough .
Here is the original link to the article we've discussed:
NATIONAL POST ARTICLE : CLICK HERE -> Credit Crisis
WHO IS STAN PROKOP ?
Stan has been acknowledged as a Business Financing expert by the FINANCIAL POST as well as the GLOBE & MAIL . He founded 7 Park Avenue Financial which has provided over 90 Million dollars of financing facilities to the SME sector in Canada . The firm specializes in receivable financing, equipment financing, banking facilities, Asset based business credit, and tax credit financing in the areas of SR&ED and Film . The company regularly receives referrals from Canadian banks, insurance companies, commercial financing companies based on its proven expertise with over 400 financings completed to date.
CANADIAN BUSINESS FINANCING
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