One sign of our current financial times has been the shift of lending power (for real estate and other types of loans) from the too-big-to-fail national banks and financial companies to smaller regional lenders. In the Philadelphia area regional players such as Beneficial Bank and Susquehanna Bank have been actively picking up business left behind by the area's national players (Wachovia, Bank of America, PNC, etc.). The big national banks have been too busy struggling to maintain financial solvency, digest government-forced acquisitions, and deal with their public image to focus on increasing deposits and loans from local customers.
Now it seems the trend is continuing to trickle down and power may be shifting to even smaller, dare I say tiny, local banks. One report in today's Inquirer tells of a group of bankers leaving regional player National Penn Bank for the tiny neighborhood-focused Valley Green Bank of Northwest Philadelphia. This shift should be a boon for local real estate investors as small community banks are often their most willing lenders anyway. As these small banks pick up new staff and deposits from their larger regional and national competitors their lending capacity and sophistication should grow accordingly. Now may be a perfect time for real estate investors to establish relationships with these banks as they look to grow their book of business.
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