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504 Loan Blog

Mercantile Commercial Capital (MCC) continues to provide America’s business owners and entrepreneurs with the Best commercial lending experience
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You’ve probably read my previous blog post about the governmental roadblocks we’ve faced over the last several months. If not go back and read it now to get up to speed. It won’t take long.

We will close a distracting chapter and continue doing what we do best: provide America’s business owners and entrepreneurs with the Best commercial lending experience and product available. Frankly, we are needed now more than ever. Throughout the 14-month long credit crisis, MCC has continued to thrive. We’ve never seen greater dealflow, and the credit quality of the deals we see is at an all-time high. We have continued to lend . . . something most others have ceased to do. I believe the prevailing phraseology in the press to describe them is “frozen.” I can tell you, in all honesty, that we are on FIRE. The complete opposite of the chilly reception you’ll get at most banks these days — they’re mostly too busy just perpetuating the problems they helped create.

The irony here, of course, is how self-confident — no, “arrogant” is a better word — so many of our banking colleagues were six and a half years ago when Geof and I approached some of them to join with us as we started MCC. We were literally laughed out of the room numerous times. “Why do you possibly think you’ll succeed specializing in a single loan program, and a government-guaranteed one at that?!?” We heard it enough to make us angry. Pretty or not, the motivation to prove someone else wrong is a strong driver when people are truly honest with themselves. Geof and I, along with our team, have channeled that irritation for many years into becoming what we believe is the nation’s premier lender to small businesses wanting to own their commercial property.

Those who doubted us and mocked us believed in what consultants often refer to as being “vertically integrated.” I call it wanting to be “all things to all people,” and you probably remember the old adage from your childhood that someone can be a “jack of all trades” but “master of none.” What we’ve seen play out over the past year or so is the exposure of this flawed philosophy applied in the banking world. In our firm, we have seen the validation of our business model . . . advocating the selection of a niche and doing all we can to dominate our niche. We’ve been the exact opposite of our banking brethren and seen results that don’t mirror theirs.

“A life fully lived” is often said to be the sweetest revenge, and I would be dishonest with you if I claimed that thought hasn’t crossed my mind over the past several months.

Which means . . . ???

Which means we are now going to recapitalize MCC to take advantage of the opportunities that present themselves and do some of the things we would have liked to do over the years within our niche, but were unable to, due to capital constraints. Our Board of Directors, by themselves, will be more than doubling our capital base with a fresh influx of capital, plus most of our ENB investors will simply be transferring escrow accounts in the next couple of months — they’re very excited about what MCC can do away from the regulations and the new follies in the ordinary banking world. If there’s one thing going through this start-up bank process spotlighted, it is that a greater understanding and appreciation of MCC developed. Without having gone through these “tortures of the damned,” I’m not so sure our investors and potential investors would have fully realized the unique strengths MCC possesses. It is that differentiation that will sustain us going forward. And if you know what has a higher price at the present moment between the following: a McDonald’s Value Meal; a Venti latte at Starbucks; or a share of Citibank common stock . . . perhaps you understand how broken the banking business model really is and should investigate a very viable alternative: MCC. Where else are you going to put your money right now? Stocks, bonds, CD’s, money-markets, and residential real estate all are precarious investments at best. Let me know if you’d like more information.

The Courage to be a Contrarian

If you’re a regular reader of this blog, then you know that I run my businesses as a contrarian — I see what everyone else is doing, and I usually do the opposite. Doing so sets you apart, but it can also keep you out of harm’s way, as we’ve seen with the financial crisis. Rather than chase easy money, as many others in the mortgage industry did, we’ve stuck to our guns and dug deeper in our chosen niche. It takes both courage and wisdom to act as a contrarian, but I’d argue more than ever that it’s absolutely essential to survive in the New Economy.

And when I say “New Economy,” I mean just that — we will emerge from the current economic struggles and find ourselves in a different economy than we were in 18 months ago. Not necessarily better or worse, but each and every one of us will need to adapt if we hope to thrive. Now is the time to start thinking and acting as a contrarian. This is why I’ve implored people for months to buy the assets all around us on sale — namely commercial real estate and other businesses — if you want more safety than that gained from Wall Street or ordinary banks. Our economy is depending on you, and me, and others like us. Let’s do our part to really and truly stimulate the economy, instead of just throwing money at broken business models.


  1. Jody Hodges says:

    We are seeing nothing but devastation, and now with the stimulus announcement regarding the SBA its the Joke of the Day, making loans to people that have bank loans , that are in default, to pay the interest, wow, what a bunch of morons, are we sure that we actually have congressmen, or are they just saying that.

  2. Mike Giles says:

    Sorry to learn of your setback with ENB, including for selfish reasons. I was looking forward to an increased opportunity to leverage MCC’s talent for the benefit of my clients.
    Onward. I’m sure that MCC has plenty of room for growth.

  3. Diane Roehrig says:

    Chris; I applaud your “contraryness”. Following the herd just gets you a mouthful of dust. Stick to your gut instincts and play by your own rules. That is what innovation is all about.

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