One reason President Donald Trump gave for wanting to roll back the Dodd-Frank financial regulations is that his friends can’t get loans.
“We expect to be cutting out a lot of Dodd-Frank, because frankly I have so many people, friends of mine, that have nice businesses and they can’t borrow money,” Trump said earlier this month.
But truth be told, the majority of businesses don’t appear to be having any trouble getting loans. In fact, data show that businesses of all kinds are enjoying access to all the credit they need these days.
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The clearest indicator comes from the National Federation of Independent Businesses, which surveys its members about credit conditions every month. In January, only 3% of business owners said all their borrowing needs weren’t satisfied, one percentage point above the low recorded in September 2015.
“The fraction of businesses ranking inadequate access to credit as their main problem… [is] an extremely low number,” Federal Reserve Chairman Janet Yellen said in her Congressional testimony Tuesday, citing the NFIB data.
The survey also found that 35% of owners reported that all their credit needs were being met while 50% said they weren’t looking for any loans at all.
Closer to home, commercial bankers expect that the strong market for business loans will continue to grow,
Joseph DePaolo, chief executive of Manhattan-based Signature Bank, which specializes in lending to small business owners, said on a conference call last month that his bank increased the size of its loan portfolio in 2016 by 23%, or $5.3 billion, and expected assets would continue to increase this year as strong business-loan volume offsets an expected slowdown in commercial real estate lending.
“We are still confident that we’re going to grow between $4 billion and $6 billion,” DePaolo said, according to a transcript provided by Seeking Alpha. (Ivanka Trump served on Signature Bank’s board from 2011 to 2013.)
But while it appears that, broadly speaking, credit is widely available, it is possible that particular borrowers are having trouble. After all, Trump did say his “friends” can’t get loans.
Fortune reporter Steve Gandel took a smart look into this and found that several of Trump’s main advisors have had little trouble securing credit recently. For example, the investment company of senior advisor Carl Icahn took on $400 million in additional debt last year, even as his firm’s credit rating was cut to junk. Blackstone Group, the private equity firm run by Stephen Schwarzman, chairman of Trump’s Strategic and Advisory Forum, saw its loans payable rise by more than $1 billion in 2016.
Crain’s tracked down a few more of Trump’s friends and couldn’t find any whom appeared to be struggling to get a loan.
Take Steve Roth, chairman and CEO of Vornado Realty Trust, the city’s largest commercial landlord, who Trump gave a shout-out to as “the great Steve Roth” and called “my man” when celebrating his New York Republican primary victory last April. (Trump owns a 30% stake in the 1290 Sixth Avenue office tower and Vornado controls the rest.)
In November, Roth’s company extended one of its two $1.25 billion unsecured revolving credit facilities and lowered its interest rate by 15 basis points. Last February, Vornado also inked a $700 million financing of 770 Broadway and in December completed a $400 million refinancing of 350 Park Avenue, deals that earned the company $440 million in net proceeds.
Another person who Trump name checked during his GOP primary victory, Bennett LeBow, is chairman of tobacco company Vector Group. Vector last year issued $235 million worth of debt at an interest rate of 7.75%, a lower rate than it has historically paid.
Then there’s Howard Lorber, chairman of hot-dog retailer Nathan’s Famous and an economic adviser during Trump’s presidential campaign. Nathan’s issued $135 million worth of debt in 2015, most of which was used to pay a $116 million special dividend to stockholders, including Lorber.
Of course, this isn’t a comprehensive list, and it remains entirely possible President Trump really does know “so many people” who can’t get a loan. But if that’s the case, it might say more about the creditworthiness of those businesses rather than anything about the banks.
One reason President Donald Trump gave for wanting to roll back the Dodd-Frank financial regulations is that his friends can’t get loans.
“We expect to be cutting out a lot of Dodd-Frank, because frankly I have so many people, friends of mine, that have nice businesses and they can’t borrow money,” Trump said earlier this month.
But truth be told, the majority of businesses don’t appear to be having any trouble getting loans. In fact, data show that businesses of all kinds are enjoying access to all the credit they need these days.
The clearest indicator comes from the National Federation of Independent Businesses, which surveys its members about credit conditions every month. In January, only 3% of business owners said all their borrowing needs weren’t satisfied, one percentage point above the low recorded in September 2015.
“The fraction of businesses ranking inadequate access to credit as their main problem… [is] an extremely low number,” Federal Reserve Chairman Janet Yellen said in her Congressional testimony Tuesday, citing the NFIB data.
The survey also found that 35% of owners reported that all their credit needs were being met while 50% said they weren’t looking for any loans at all.
Closer to home, commercial bankers expect that the strong market for business loans will continue to grow,
Joseph DePaolo, chief executive of Manhattan-based Signature Bank, which specializes in lending to small business owners, said on a conference call last month that his bank increased the size of its loan portfolio in 2016 by 23%, or $5.3 billion, and expected assets would continue to increase this year as strong business-loan volume offsets an expected slowdown in commercial real estate lending.
“We are still confident that we’re going to grow between $4 billion and $6 billion,” DePaolo said, according to a transcript provided by Seeking Alpha. (Ivanka Trump served on Signature Bank’s board from 2011 to 2013.)
But while it appears that, broadly speaking, credit is widely available, it is possible that particular borrowers are having trouble. After all, Trump did say his “friends” can’t get loans.
Fortune reporter Steve Gandel took a smart look into this and found that several of Trump’s main advisors have had little trouble securing credit recently. For example, the investment company of senior advisor Carl Icahn took on $400 million in additional debt last year, even as his firm’s credit rating was cut to junk. Blackstone Group, the private equity firm run by Stephen Schwarzman, chairman of Trump’s Strategic and Advisory Forum, saw its loans payable rise by more than $1 billion in 2016.
Crain’s tracked down a few more of Trump’s friends and couldn’t find any whom appeared to be struggling to get a loan.
Take Steve Roth, chairman and CEO of Vornado Realty Trust, the city’s largest commercial landlord, who Trump gave a shout-out to as “the great Steve Roth” and called “my man” when celebrating his New York Republican primary victory last April. (Trump owns a 30% stake in the 1290 Sixth Avenue office tower and Vornado controls the rest.)
In November, Roth’s company extended one of its two $1.25 billion unsecured revolving credit facilities and lowered its interest rate by 15 basis points. Last February, Vornado also inked a $700 million financing of 770 Broadway and in December completed a $400 million refinancing of 350 Park Avenue, deals that earned the company $440 million in net proceeds.
Another person who Trump name checked during his GOP primary victory, Bennett LeBow, is chairman of tobacco company Vector Group. Vector last year issued $235 million worth of debt at an interest rate of 7.75%, a lower rate than it has historically paid.
Then there’s Howard Lorber, chairman of hot-dog retailer Nathan’s Famous and an economic adviser during Trump’s presidential campaign. Nathan’s issued $135 million worth of debt in 2015, most of which was used to pay a $116 million special dividend to stockholders, including Lorber.
Of course, this isn’t a comprehensive list, and it remains entirely possible President Trump really does know “so many people” who can’t get a loan. But if that’s the case, it might say more about the creditworthiness of those businesses rather than anything about the banks.
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