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Called Loan

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msquared48

msquared48

Structural
Aug 7, 2007
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A contractor client of mine just had his business loan called. Anyone else seeing this? I hope this is localized to him I am asking a few questions Monday, but may get little if any reliable information


Mike McCann, PE, SE (WA)


 
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I have never heard of this...... But you wave waaaaay more experience than I do. I have some clients who have recently put themselves in very large holes using every lunch of leverage they could. So it seems that money is still flowing.
 
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Mike...usually mismanagement, not an industry or financial trend. Have not seen any of that in my area and we sometimes check financials on contractors that bid our projects.
 
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Saw lots of contractors get in trouble a few years ago, only one I can think of in last year.
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Have noticed my collections slow significantly since 1st of this year, and that across multiple clients. Invoicing is up, but speed of payment is down. Not sure yet if it is pressure upon clients, or I just need to tighten my own collections system, working on my system first.
 
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SteelPE...

Most bank loans do have a recall clause that is overlooked by most. Happened in 08 a lot in order for the banks to meet the tighter loan requirements of the Fed.

After that experience, I am on the watch for similar circumstances.

Mike McCann, PE, SE (WA)


 
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Msquared48,
As a general rule most banks do not call loans unless they feel insecure. Are you aware if your client has been late on payments, or defaulted on any other loans?
B.E.

You are judged not by what you know, but by what you can do.
 
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Not privy to that info. But I am going to ask a question or two anyway.

Oh, and thanks Ron for the information.

Mike McCann, PE, SE (WA)


 
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We have had a few projects stall from the newer developers. Some of the long time developers are purposely stalling as they build multiple sites, looks like they are trying to stagger the sites so the crew can go from one job to the next with no down time. Construction loans still sound harder to get last time I asked about 6 months ago. Quite a few of the flipping projects are private investors pooling money together. Buy $1.5mil property, tear down, then new house.

The ones to me who look like they are frothing at the mouth for work are the medium sized Architects. All the engineers and surveyors are swamped.

B+W Engineering and Design | Los Angeles Civil Engineer and Structural Engineer
 
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I'm not sure how the market is in other metro areas, but Atlanta is in the middle of a huge multifamily boom, that's ripe for a bust whenever the financiers wise up. While the market may be here today, I doubt it holds much longer past what's going in the ground right now, and yet clients are still trying to spark up new projects. It will be interesting to watch.



Hydrology, Drainage Analysis, Flood Studies, and Complex Stormwater Litigation for Atlanta and the South East -
 
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I feel the Chinese investment money that is driving much of the market will at least taper off, if not stop completely, real soon.

Mike McCann, PE, SE (WA)


 
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I read that China is coming for the money from people who left the country or were washing the money into Canada. I wonder how that affects things.

We are getting started on 2 more apartment buildings right off of Sunset in Hollywood. Just as one project has about 4 months left to build, their next project is about done with plan check. And then these 2 in the queue. The last bust didn't stop them from building either, just not as aggressive, and from what I heard they did really well. All of the engineers stay the same but the Architects keep changing. They went full circle and got their favored Arch out of retirement.

I was at my old job and the phones were silent for most of the day. This has been their busiest year in the last 50 years of being open.

B+W Engineering and Design | Los Angeles Civil Engineer and Structural Engineer
 
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