On Tuesday, Bloomberg scooped its rivals with a story that Goldman “cuddly squid” Sachs would be teaming up with Warren Buffett to provide assistance — ranging from counseling to help in obtaining funding — to 10,000 small US businesses.
But they’re not the only ones getting in on the helping middle (market) America game, as the La Times reported:
Former L.A. Lakers great Earvin “Magic” Johnson, who has spent his post-basketball career developing commercial real estate ventures in underserved urban neighborhoods, now is targeting another market that he figures is in need of help: lending to mid-size companies.
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The venture, TCW CapitalAssist Management, plans to make secured and unsecured loans with capital raised from institutional investors. The business won’t target urban companies exclusively, but Johnson is expected to be an advocate for those firms in particular.
Johnson’s company has “a demonstrated expertise [in] urban areas that we do not have at TCW,” said Mark Attanasio, a senior executive at TCW.
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Johnson, who has built movie theaters, Starbucks stores and other retail businesses in urban locations around the country over the last 20 years, said the venture with TCW addresses a need he has seen mushroom since the credit crisis has worsened over the last two years.
“We were getting all of these calls” from businesses about credit, Johnson said. “We didn’t know how to help them.”
The “middle market” means different things to different financiers. Attanasio said the TCW/Johnson venture wasn’t setting a minimum size for the companies it expected to target, but that it would seek to make individual loans worth millions of dollars rather than “$100,000-type loans.”
In the midst of this outbreak of philanthro-capitalism (emphasis on the capitalism), it would be remiss of us not to mention Wal-Mart’s own efforts to reinforce its considerable market power help its struggling suppliers. As the Wall Street Journal reported:
Wal-Mart informed its suppliers in a Nov. 2 letter of its new “Supplier Alliance Program,” in which eligible suppliers can get payment for their orders in 10 to 15 days within its receipt of goods, compared with the more typical 60 to 90 days.
Under the program, suppliers can sell their Wal-Mart invoices to the retailer’s partner banks, including Wells Fargo & Co. and Citigroup Inc., according to the letter, at interest rates based partly on Wal-Mart’s credit rating. In traditional factoring, lenders give manufacturers cash for their receivables and collect payments on those invoices.
You know what they say: where there’s incredible opportunity to disintermediate stressed banks/bolster one’s public image/pwn the competition, there’s going to be a basketball star, a former investment bank and a major US retailer not too far away.
(H/T @StockJockey)
Related links:
Shaq wants to attack foreclosures – FT Alphaville