Third Quarter 2014 eNewsletter

 
 
Monetary Policy and Economic Vitality
By Doug Williams, President & CEO

Doug Williams
Douglas L Williams  President & CEO

In responding to the global financial crisis in 2008, the severe recession which followed, and the still tepid recovery, the Federal Reserve has pursued an accommodative monetary policy campaign of historic magnitude and duration. This policy arguably prevented a financial meltdown, rescued the economy, and stimulated resurgence of activity on Wall Street and Main Street.

 

However, these results have not been achieved without cost or risk. As the Fed's asset purchase program is curtailed this fall and the markets look toward the eventual increase of short term rates, the dimensions of these risks are becoming more apparent.

 

The foundational risk is moral hazard. Extraordinarily low interest rates subsidize borrowers, penalize savers, and discourage capital formation. Without adequate long term investment in creative growth opportunity, economic productivity and progress are sure to suffer.

 

Borrower subsidies and the excessive debt accumulation that results inevitably create asset bubbles. Whether it was the Dutch tulip mania of 1637, successive debt crises or panics in the US throughout the 19th century, the recent housing crisis, or perhaps today's US treasury market, the historic record suggests these bubbles are not easily resolved without significant or even catastrophic loss to lenders and savers.

 

Another significant risk or cost is that of general or specific price inflation and the erosion of purchasing power. Excessive price inflation is perhaps the cruelest of all costs to consumers resulting in lower standards of living over time and potential risk to political and social stability.

 

Federal Reserve officials are facing critical monetary policy decisions which will affect our economic well-being for a generation or more. Can we transition to more normal monetary conditions and interest rates easily? The risks appear manageable, but we've been here before and the long record of central banking indicates the transition will not be smooth. However, hope lies in a timely and gradual unwinding of policies now in place.

 

The dual mandates of price stability and full employment are often contradictory and difficult to balance. Expect the Federal Open Market Committee to carefully assess economic data as it develops and move decisively as economic trends become clearer. History will judge the wisdom and efficacy of decisions made.

 



Tips for Loan Candidates

By Larry Neal, Assistant Vice President, Risk Management

 

Larry Neal
Assistant Vice President, Risk Management

After three years in business, you've made it! The phone is ringing off the hook. Orders are rolling in, and you are having trouble keeping up with demand. It's a great feeling for a business owner when you realize that you have been so successful that you must expand to keep up with the demand for your product. However, expansion often requires additional capital, so it may be time to ask your bank for a loan.  

 

Applying for a business loan may seem like a daunting process, but you can make the process easier by being organized and presenting your company in the best light.

 

Prepare Quality Financial Statements - Use an Excel spreadsheet, QuickBooks, a CPA-prepared tax return, or something along these lines to produce your financial statements. Your financial statements will be a meaningful part of the bank's analysis and it is worth the investment to ensure that they represent your business well. Follow GAAP (Generally Accepted Accounting Principles) on your interim statement, and make sure all of your numbers add up. Do your statements show your bank that you are managing the performance of your business, and that you can trust the accuracy of your financial statements? Help yourself and your bank out by coming prepared with accurate and organized financial statements.   

 

List Your Collateral - Take an inventory of your business assets that can serve as collateral for your potential loan. This list may include accounts receivable, inventory, buildings, machinery or equipment, and so on. In general, your bank will lend different percentage amounts based on the potential recoupment of the pledged assets' value. In addition, personal assets may provide sources of additional collateral if necessary, such as equity in real estate and brokerage accounts.    

 

Develop Your Presentation - Why do you need this loan? Establish the reasoning behind your request, and prepare a well-organized synopsis to show your bank what you are looking for and why. Include a summary of the background of your company and your professional experience as well as any key employees. Additionally, create a list of significant business relationships and customers that may be able to provide a good recommendation for you and your business.    

 

Before you approach your bank for a loan, take the time to think through and prepare these items. By being proactive and looking at these items in advance, you can make the decision process easier for your bank and give yourself a head-start in obtaining a loan.


Client Pictured:
CaJa Popcorn

Pictured Above: Kevin Peak, owner and founder of CaJa Popcorn.

CaJa Popcorn is a gourmet popcorn producer and distributor located in the Peachtree Battle shopping center in Buckhead. CaJa Popcorn offers customization for both flavors and labeling for its clients.

To learn more, visit cajapopcorn. com.

Atlantic Capital Announces Franchise Lending Group

Atlantic Capital Bank is pleased to announce the recent hire of Mike Smith, Senior Vice President of ACB's new Franchise Lending Group. Mike Smith, an Auburn University grad, comes to ACB with nearly 20 years of banking experience. See his full bio on our website.

If you or someone you know are interested in learning more about Franchise Lending, please contact Mike Smith at (404)  460  -  4426.

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Go! Mobile


Need mobile banking on the go? Check out Atlantic Capital Bank's consumer mobile banking app, Go! Mobile. Use your iPhone, iPad, or Android to easily:
 

* deposit a check

* pay a bill

* make a transfer

* view your account balance

* find an ATM

* contact client services 

 

Learn more at:  

atlanticcapitalbank . com

/go-mobile-banking 

 

 


Atlantic Capital Bank

3280 Peachtree Road NE, Suite 1600
Atlanta, GA 30305

Member FDIC. Equal Housing Lender.