For any business owner needing a commercial loan or working capital financing, the concept of "Dead Banks Walking" should prove helpful. This description was used very accurately by the Nobel Prize winning economist Paul Krugman (New York Times, 1-18-09, article entitled "Wall Street Voodoo") when he recently noted that many banks have essentially already gone broke (based upon a true net worth assessment that recognizes that many of their assets are either worthless or at least worth well below the values reflected on their books).

This observation most certainly calls into question why the government should be throwing money at these “zombie banks” (a term also used by Mr. Krugman) in the first place. But perhaps of equal importance, this viewpoint also offers small business owners some insights as to how they should select a potential source for their future commercial financing activities. Not only have most of the largest banks in the United States been shown to be worth even less than General Motors or Merrill Lynch (or Lehman Brothers — which is already in bankruptcy), but they have also almost universally shown the worst business judgment imaginable in terms of how they spend money and make loans.

This is NOT behavior which should be rewarded by astute business owners when determining which bank deserves their business. You CAN do better! Fortunately AEX Commercial Financing Group is aware of several banks that are very visible exceptions to the “Dead Banks Walking” metaphor. Please contact us for a candid discussion about how to eliminate “zombie banks” from your future business finance funding.