My client was stressed.

“The banks (or most of them) got a clean bill of health, “ he began. “The market is in a buying frenzy,” he continued. “Then why did my business loan just get denied?”

He’d returned from a visit to his bank, the US branch of a famously solvent European outfit; and rather than huffing and puffing furiously, he was reflective. Almost calm. Observing.

“There is a huge disconnect here,” he told me. His branch manager had explained that he was the fourth applicant this week, with impeccable credentials, healthy collateral, but with moderately constrained cash flow, due to the recession, to have a loan application denied.

“If the banks are ok, if capital requirements are solid, then why can’t grade-A applicants get a small business loan?”

He answered it himself: “Maybe they’re hoarding cash. Maybe they’re gun shy. Bottom line is that we can’t grow the business (and if this keeps up sustain the business….) if we can’t access cash.

He continued philosophically: he was lucky. His firm had adequate resources to weather the storm. But he took his  recent afternoon’s frustration as business information: that despite what our expectations are, and what we’d all like to believe about hope, with money still impossible to access (and, he added, this would’ve been something like a 7% adjustable loan at these rates! The bank would’ve made a killing while helping a long-time customer), I’m afraid we’re gonna have to buckle up for the long, tough haul.

So this is the real bank stress test: the stressed bank’s testiness passed along to stress the anxious customer. Buckle up, indeed.

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