Most of the loans that I can put a business into are ultimately going to end up in an SIV -- a "Structured Investment Vehicle". SIVs are like any other tool -- they aren't inherently good or bad, they're just tools. But because of the subprime lending meltdown, there's a tremendous amount of turmoil in the lending world around SIVs right now.
Here's an example of the repercussions: today's London Times has the story of a $2 billion SIV set up by a German bank that has gone into receivership. The Rhinebridge fund, owned by IKB, defaulted on payments to creditors last week. If I'm reading the story correctly, and if the reporter has the facts right, then there are $600 million in assets that the fund controls. So investors are "only" losing
70 cents on the dollar. I've seen worse.
Here's where things get really interesting: Today's Seattle Times reports that the King County Investment Pool has $100 million in the aforementioned Rhinebridge fund.
So King County may have just taken a $70 million haircut. To have a chance of meeting their obligation to bondholders, they have to find a way to invest their money in safer ways... but if they play it too safe, they won't make enough to pay the bonds back.
High quality commercial loans are going to be an expanding area of interest for lenders. There's a world of difference between loaning to a profitable enterprise and loaning 100% of a home's value to a family with no assets, a history of bankruptcies and three maxed credit cards.
TIP: if you can't show a profit on your tax returns, all is not lost. If your business bank statements can show a history of more money going in than out, there are loan programs that can help. Make sure your credit is good and try to keep any credit cards associated with your business either paid in full or at least below 50% of the available balance.