Good News for Syndicated Revolving Credit Lines

Here’s an excerpt from an article I read on CFO Magazine’s website, CFO.com, “Revolvers Return, with Some Twists: Good news for credit-seekers as banks relax, a little” by Vincent Ryan. Click on the title to read the article in its entirety.

“In 2010, lenders doubled their issuance of syndicated, revolving lines of credit, a staple of corporate finance, according to data from Thomson Reuters Loan Pricing Corp., with borrowings accelerating the second half of the year, to $381 billion.

During the financial crisis, banks cut their exposure to revolvers, downsizing instruments or flatly refusing to renew them. Now, individual banks are slowly raising the amount of untapped commercial-credit commitments they’re willing to keep on their books, according to federal call reports.”

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Medium-sized companies can participate in syndicated, revolving credit lines. Talk to your banker. If you bank with a community or regional bank that has a strong business customer focus, they may occasionally syndicate loans that are too large to for their portfolio. The bank may take the lead. So, if you need $15 million and the typical loan limit for your community bank is $8 million (meaning that most of the loans they approve are $5 million or less), in order to keep your business they may wish to syndicate the loan among 3-4 other banks of their size. You never know until you ask.

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About Tiffany C. Wright - The Resourceful CEO

Tiffany C. Wright is the author of “The Funding Is Out There! Access the Cash You Need to Impact Your Business” and “Solving the Capital Equation: Financing Solutions for Small Businesses.” She is the founder of The Resourceful CEO, which helps owners of small/medium-sized businesses prepare their businesses for sale. Tiffany has an MBA from the Wharton School of Business, sits on non-profit boards and serves as a business mentor with the Cherie Blair Foundation.
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