Promising Numbers Mask True Problems for Big Banks

19:38 30 October in Blog
A recently released report on the economic conditions and earnings of big banks seem to paint a picture of stability. However, a more plausible interpretation would attribute it to stagnation and the difficulties that lie ahead. Overall, investors see a rather unimpressive rate of return in terms of equity. Meanwhile, among the big banks, Citigroup came out slightly above expectations and J.P. Morgan Chase and Wells Fargo slumped a little in the third quarter.


Wells Fargo’s returns fared somewhat better, which is mostly due to the nature of banking versus more volatile capital markets. Even with this advantage, returns still didn’t live up to those from the year before, which were almost a whole point higher. J.P. Morgan, on the other hand, has hit a plateau at a 10% return rate, casting a more negative shadow on the recent numbers. Conversely, Citigroup looked strong in many areas. They even registered profits through legacy holdings and downsizing, but still only managed a 6.5% return.


Analysts have pinpointed several reasons for this lackluster performance.  J.P. Morgan and Citigroup both still face legal challenges in the midst of the global slowdown. Also, interest rates have remained extremely low while demand for loans has remained steady.  All this as regulations and the required amounts of capital have gone up. 


Some experts cite these facts as proof that this reflects a permanent shift in returns that investors can expect in the future. Of course, banks also have to conform to stress tests performed by the Federal Reserve, which makes them less flexible than firms in other industries. Other macroeconomic factors don’t seem to bode well either, as new mortgages issued at J.P. Morgan, Citigroup and Wells Fargo fell by 14%, 51%, and 40%, respectively.


Trading in certain commodities and currencies has generated some growth. But these mostly signify slightly less anemic banks as opposed to strong ones. Some hold out hope for increased rates in the near future, although many investors have become restless due to the impact of current low rates on net interest margins.


Banks are still finding growth opportunities hard to come by without higher returns. Price-to-book multiples for J.P. Morgan and Citigroup have averaged 1.07 and .076 times, respectively. So, for the time being, the only solution for banks is to rely on cutting costs and looking for gains elsewhere. Despite the initial appearance of the numbers, they really just show that sometimes silver clouds have dark linings.

As the major money center banks continue to adjust their operations to Dodd-Frank’s lower earnings environment, cost cuts translate into less personal service.  For small business owners, less personal service means a higher likelihood that their loan applications will be processed automatically through computer software. Thus, removing any discretion from the loan approval process.  Capstone Capital Group, LLC., on the other hand, provides the personal service of an old time banker and does not rely on the credit of its clients to make their credit decisions.  Capstone relies on the credit of its client’s customers to determine whether or not they will get the working capital they need.
As the Feds continue to scrutinize and further regulate the activity of Big Banks, and with interest rate increases looming in the future, small to midsized business loans are becoming increasingly more difficult to obtain.  What is a business owner to do if he or she needs working capital to make payroll or expand operations?  Capstone Capital Group, LLC has the solution.  We have been helping small to mid-sized businesses for years obtain the necessary working capital they need to sustain and grow during uncertain economic times without all the red tape you normally get from most banks.
 
Capstone Capital Group, LLC specializes in Single Invoice Factoring (“Spot Factoring”) for firms in need of immediate cash. Spot Factoring provides flexible, no contract invoice selling in exchange for working capital from Capstone Capital Group.  For more information about our business funding solutions and how we can help your business grow and succeed, give us a call today at (212) 755-3636, or visit our website at www.capstonetrade.com.

 

Capstone Wishes You a Safe and Happy 4th of July!

18:51 03 July in Blog
The 4th of July is dedicated to honoring our great nation and taking the time to appreciate and celebrate our independence and freedom.

 

Thanks to all of our loyal customers and partners, we continually work together to help this country thrive. Together we build, fund and grow better businesses that benefit our economy and our country as a whole.

 

Look to Capstone Capital Group, LLC, to help your business start, grow and thrive. Capstone prides itself as a factor whose objective is to help its clients succeed. Our partnership, along with optimism and dedication in our free market society, is the catalyst which spurs economic growth and a more prosperous U.S.A!

 

Thank you for your continued loyalty and support. We wish you all a safe and happy 4th of July!
For more information on how to partner with Capstone, please email [email protected] or call (212) 755-3636 to speak with a representative today.

Now Trending! Outlook is Good for Start Up Businesses in the U.S.

19:16 26 June in Blog
According to a recent report detailed in a publication entitled “Global Entrepreneurship Monitor”, 2013 was an optimal year for start up businesses. The report was based on a survey of adult American entrepreneurs between April and June of last year.  The report reflected a steady increase of new business creation since the recession leading up to 2014.
 
A Washington, D.C. economist attributed increases in business creation with access and availability of startup capital, whether from banks, angel investors or family members.  Likewise, in a downturn where credit markets are frozen and capital is more difficult to come by, this consideration is reflected in the overall number of startup ventures in any given period.
 
While the above reflects an optimistic outlook for budding entrepreneurs ready and able to start new business ventures, a different study, conducted by the Ewing Marion Kauffman Foundation (“Kauffman study”), painted an entirely different picture. 
 
The Kauffman study, which based its data from the U.S. Census Bureau and the Labor Department, concluded a lesser percentage of new business startups were created in 2013; and an even lesser amount of startups were created in 2011 and 2012.  A researcher for Kauffman attributed the conclusions of the study to the lower number of “new entrepreneurs coming out of unemployment” or “necessity-driven entrepreneurs” who, out of sheer necessity, are forced to start businesses because they are unable to find full time employment. 
 
Despite the disparity between the two reports, there does appear to be a trend towards economic recovery in the U.S. and an aim by the government, factoring companies like Capstone Capital Group, LLC, and others to help new business start, grow and thrive. Capstone prides itself as a factor whose objective is to help its clients succeed. As your factoring partner, we offer commercial financingsingle invoice factoring, which can provide you with the capital you need to accelerate your cash flow and help your business continue to grow and thrive in today’s market on a more flexible basis than other factoring companies.

 

Optimism in a free market society seems to be the catalyst which spurs economic growth in most cases.   Let’s hope the optimism continues to grow and investment capital remains steady in years to come.

 

For more information on how Capstone can help, please email [email protected] or call (212) 755-3636 to speak with a representative today.

 

Celebrating the 100th Anniversary of the Bronx

20:40 15 May in Blog
Claritza Wilshire, Business Development Officer at Capstone Capital Group, LLC attended the Sixteenth Annual Bronx Banker’s Breakfast.  The meeting was hosted by the Business Initiative Corporation of New York (BICNY) and BronxBorough President Ruben Diaz, Jr.
The meeting focused on revitalization of the Bronx’s economic activity and financial projections. The event was part of the several ceremonies commemorating the 100thAnniversary of the Bronx.
Capstone Capital Group, LLC attended with the following institutions: Citibank, Popular Community Bank, Rite Check, Capital One Bank, Hudson Valley Community Bank, Bethex Federal Credit Union, JP Morgan Chase, Ponce De Leon FSB, Spring Bank, Webster Bank, Wells Fargo, Apple Bank, Flushing Savings Bank, M&T Bank, Signature Bank, IDS Corporation, Monroe College, US Small Business Administration, SBDC at Lehman College and SCORE.
Capstone Capital Group, LLC is committed to supporting the development and redevelopment of Bronx infrastructure projects thru its funding programs.
Subcontractors who are winning bidders can rely on Capstone Capital Group, LLC factor programs to assist them in meeting their contractual obligations, working capital needs and supplier credit facilities.
Is it time for your company to partner with Capstone and arrange a factoring facility for your working capital needs? Call us today at (212) 755-3636 or visit our website at www.capstonetrade.com.
View our photos from the Sixteenth Annual Bronx Banker’s Breakfast:
Marlene Cintron, President of BICNY and Claritza Wilshire, Capstone Business Development Office
Bronx Borough President Ruben Diaz, Jr. and Claritza Wilshire, Capstone Business Development Office
Madeline V. Marque, VP of BICNY, Claritza Wilshire, Capstone Business Development Office and Ruben Diaz, Sr.

1st Quarter Self Assessment – Business Goals and Objectives

16:47 27 March in Blog
The end of the first quarter of 2014 is upon us. It’s time to evaluate your business goals and objectives against actual performance.If you wrote your goals down as was suggested in Are You Better Off Today Than You Were A Year Ago?, you have the means to objectively analyze where your business stands and what you achieved over the first three months of 2014.
If you exceeded your goals, analyze why:
  • Were you too conservative when you established them?
  • Did you line up your resources properly and did everything else fall in place?
  • Did you get lucky?
Fun fact: do you know what the definition of Luck is?
Laboring Under Correct Knowledge – people make their own luck by being prepared!
We advised on hiring retired executives to assist with growth plans, using temporary employees to fill gaps upon receiving that larger contract and lining up financing or funding through a company like Capstone Capital Group, LLC.With these three tools at your command, you should have met or exceeded your goals.

Reasons Why You Didn’t Reach Your Business Goals

For those of you who have not met your goals for the first quarter of 2014, let’s analyze why:
  • Were you overly optimistic about the establishment of your goals?
  • Did you line-up the proper resources to succeed and to accomplish the goals?
  • How close or far away were you from achieving your goals?
  • Did you line up the staffing and funding to support your growth for cash flow?
The key here is NOT to get discouraged but to be honest with yourself and fix the obstacles that are holding you back immediately.
Today Capstone received a call from a subcontractor, and we would like to share the story here:
Back in October 2013 when Capstone first met this subcontractor, we discussed the establishment of a funding facility through accounts receivable factoring to support his growth. He was anticipating the award of a few government contracts.This subcontractor was successful in obtaining the contracts and started the jobs however he has unfortunately run out of cash.
Part of this subcontractor’s strategy is the exact formula for success – he probably worked for several years to convince the general contractors to develop confidence in his ability to deliver. The contract awards were received and there was appropriate staffing for the project however he failed to line-up a funding facility.
Now, guess what his next move was? He called the office in a panic and asked how quickly Capstone could put a funding facility in place using his accounts receivable to factor. Capstone will move as quickly as possible to support him, but it’s more important to take a look at the added stress this subcontractor has taken on because he did not plan properly.
Construction and Professional Services jobs are leading the economic recovery. Many of Capstone’s clients are taking advantage of this growth. Where do you stand?

Download: Infrastructure Investment & Jobs Act – Contract Opportunities and Funding Analysis

Capstone wants your business to take full advantage of the opportunities (or use projects) available through the Infrastructure Investment & Jobs Act recently signed into law.

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