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How’s Business? Sunlight Ski & Bike Shop experiences spike as people rediscover passion for outdoors

Kale Hall, a Sunlight Ski & Bike Shop ski and snowboard technician, waxes a snowboard Saturday as a waxing machine uses infrared light to heat-treat wax applied to skis.
Ike Fredregill/Post Independent

The wave of interest in outdoor sports created during the height of the pandemic in 2020 is losing momentum, but a year later, sales remain strong at Sunlight Ski & Bike Shop, store Manager Russell Cabe said.

“Things aren’t quite what they were, but there is a steady demand, and our numbers are still higher than before the pandemic,” Cabe said. “Supply chains were a challenge last year. They’re improving, but not perfect, and that drives demand a little higher as well.”

Located at 309 Ninth St., the ski and bike shop was founded around 1989 by then-Sunlight Ski Resort as a way to strengthen the connection between Glenwood Springs and the resort, Cabe said. Although snowboards are not in the shop’s name, Cabe and his staff heavily emphasized that snowboards are a key component to the business model as well.

“The store was originally located in an A-frame building near where Jimmy John’s is now, but we moved to Ninth Street in the mid-late ’90s,” Cabe said. “We’ve been providing the same services ever since we opened: sales, service and rentals of skis, snowboards and bikes.”

In recent years, customer interest in bicycles, Alpine Touring (AT) skis and cross-country skis has grown significantly.

“They were getting big before last year, but I think a lot of people found them great during the pandemic, because you could ski or bike anywhere, and it was very easy to distance yourself from others,” Cabe said.

When COVID-19 hit, the resort was nearing the end of its winter season, but the ski and bike shop was ramping up for summer.

“We ended up doing a lot of business outside in the big parking lot east of us,” Cabe said.

While some industries were forced to furlough employees, increased sales allowed Cabe to keep most of his staff, and the shop hasn’t suffered from the same labor force shortages plaguing other businesses throughout the nation.

“We have an excellent staff, and we’ve been very lucky to retain them,” he said. “Our employees are great at pitching in ideas that we’ve been working on implementing this year.”

Both Sunlight Mountain Resort and the shop saw a boost in new customers to the area, and hopes remain high they will return for the 2021-22 winter season.

“There’s a lot of positive feelings that we’re looking at a good snow year,” Cabe said. “I believe a lot of people discovered what our hidden gem had to offer last year, and I think they’ll be coming back for more.”

Reporter Ike Fredregill can be reached at 970-384-9154 or by email at ifredregill@postindependent.com.

Glenwood Springs print shop capitalizes on small workforce, flexibility

Print Works owner Steven Peck mounts a foam-core presentation board Friday morning. Increased indoor and outdoor signage demands helped Peck survive the 2020 economic downturn.
Ike Fredregill/Post Independent

Adaptation, consistency and rising to meet opportunities head on helped Print Works weather the worst of the pandemic, and now, business is nearly back to pre-COVID-19 levels, owner Steven Peck said.

“What really got us through was commercial signage,” Peck said. “That first week everything shut down, I had a dozen calls for waterproof, outdoor signs. I was scrambling to find a solution.”

On the quick, he secured a wide-format printer, allowing him and his only employee, Todd Harris, to stay in business.

“Our primary customers are other businesses,” Peck said. “So when they shut down last year, that really impacted our bottom line.”

Not every business stayed afloat, and when two competitors in the valley closed shop, Peck said he saw a spike in orders.

“It’s unfortunate, but we were glad for the extra work,” he said.

Keeping Harris on the payroll throughout the hard times was paramount to retaining customers.

“Todd provided our clients a level of consistency that I know not everyone was able to provide in 2020,” Peck said. “This is a small company with a small crew, and I think in the end, that was to our benefit.”

Unstable supply chains have created new challenges for businesses around the nation, but Print Works sources their products from U.S. companies, and Peck said they haven’t seen interruptions in their orders.

“We have experienced increasing prices, but that seems like it’s happening across the board,” he said.

A New Castle, Wyoming, native, Peck attended the University of Wyoming to become an engineer, but he switched midway to graphic design. After working his way up to head printer at a print shop in Laramie, Wyoming, Peck said he realized he was ready to run his own business.

In 2011, he moved to Glenwood Springs and purchased Print Works.

“My life dream was to live somewhere I could ride the snow in the morning and still make it to work on time,” he said. “I love live music, too. So, being this close to Denver and Red Rocks Amphitheater is a huge plus for me.”

Ten years later, Peck said he’s just getting started.

“I feel like the worst is in the rearview mirror,” he said. “I’m confident we’ll be here for at least another 10 years.”

Reporter Ike Fredregill can be reached at 970-384-9154 or by email at ifredregill@postindependent.com.

Nonprofit Carbondale preschool seeks donations to expand new facility

Little Blue Preschool teacher Brynlee Elswick gives the ready-set-go for children in the preschool-age class to run down the grass mound that’s in the outdoor play area at the school’s new location at 55 N. Seventh St. in Carbondale on Wednesday, Sept. 29, 2021.
John Stroud/Post Independent

A renovated child day care in Carbondale could double its capacity in the near future with support from the community.

Little Blue Preschool, a nonprofit child care facility and sister program to the El Jebel-based Blue Lake Preschool, moved into a remodeled residence at 55 N. Seventh St. in July, and the organization is asking for donations to help fund the second phase of remodeling, scholarships and teacher retention programs, said Kathryn Sansone, who is working with the preschool to promote the fundraising initiative.

Sansone said the preschool is looking to raise about $1.5 million during the next three years, and as of Wednesday, she said they had reached close to half their goal with the help of large donations from Alpine Bank, Valley View Hospital and the Aspen Skiing Co.

Blue Lake and Little Blue Preschools Director Michelle Oger said the child care program began in El Jebel as part of the Blue Lake housing development in 1993. In 2000, Blue Lake Preschool moved to a nonprofit model, providing the ability to fund raise and apply for grant funding.

“We were licensed for 31 kids a day, ages 1-5, at Blue Lake in January 2002,” Oger said. “Now we’re licensed for 134 at Blue Lake and 38 kids at Little Blue, ages 6 weeks to 10 years old.”

Little Blue opened in a rental home on Carbondale’s Eighth Street in 2015, but after the facility’s three-year lease was up, the landowners moved to a month-to-month format. Oger said that created a sense of insecurity for the preschool’s board of directors, which is filled by a combination of parents with children enrolled in the program and community members.

Little Blue Preschool teacher Michelle Boyle reads and interacts with children in the toddler class at the school’s new facility at 55 N. Seventh St. in Carbondale on Wednesday, Sept. 29.
John Stroud/Post Independent

After a three-year search, the organization purchased the Seventh Street location with a construction loan, Sansone said.

“On Friday (Oct. 1), the loan will switch over to a standard mortgage, with the initial renovations done,” she said. “So that’s why we chose that day to host our grand opening and kick off this fundraising initiative.”

Little Blue’s new home cost about $1.3 million, but Sansone said the fundraiser money wouldn’t be used to pay the entirety of the loan. About $500,000 of the donations are slated to be used to build additional school rooms at the facility, increasing capacity by about 45 students a day.

Another $250,000 could go to teacher retention programs, including efforts to keep pay rates competitive and provide scholarships for underprivileged families, Sansone said.

“Keeping good, consistent teachers is not only difficult in this valley, but it’s incredibly important for our kids’ learning and development,” she said.

The preschools currently have 214 students enrolled, though few of those students attend every day, Oger said.

“From Glenwood to Aspen, and likely beyond, there’s just not enough child care options,” she said, adding all three of her own children went through the program. “We see a lot of kids who might be with us two days a week, then with a grandma another day or family friends and finish out the week at an unlicensed care provider in someone’s home.”

But even with hundreds of students enrolled, Oger said the preschools’ waiting list is more than 200 families long, some of whom might wait years before receiving a preschool slot.

“We get dozens of calls every week about availability,” she said. “Some people move to the valley thinking they will be able to find care immediately with no idea of how few options there are here.”

Sansone, who’s kindergarten-aged son is enrolled in the program, said increasing Little Blue’s capacity will go a long way toward addressing some of the valley’s child care challenges.

“Michelle and her team have done a very good job of stretching every dollar they have, so I know these funds will be put to good use,” she said. “As a parent, I am extremely thankful for how good Michelle and her team are.”

For more information about Blue Lake and Little Blue Preschools and their fundraising initiative, go to BlueLakePreschool.org.

Reporter Ike Fredregill can be reached at 970-384-9154 or by email at ifredregill@postindependent.com.

How’s Business? Stillwater Counseling offers services for those struggling with addiction

Wendy Caldwell, of Stillwater Counseling. Shannon Marvel / Post Independent

Those struggling with addiction and recovery have another outlet to tap into in Stillwater Counseling.

Wendy Caldwell with Stillwater Counseling said the business has been helping youth struggling with addiction.

“We’ve got so many kids that are coming in that are really struggling — a lot of kids struggling with drug and alcohol addiction,” Caldwell said.

Caldwell added that it’s been difficult to get the word out about the counseling services offered at the location, which she decided to open up last July.

“I used to teach at Glenwood Elementary for 20 some years before I got into counseling. Last July, I thought I was going to open my own business, because it’s a passion for me,” Caldwell said, who previously worked at Alpine Springs Counseling.

“I’ve gotten sober myself over the years. I get inspired when people walk through that door and say, ”I need help.“ Because that’s courageous. It’s just inspiring to see people walk through difficult situations and take the action to improve their lives and reach different outcomes.”

Caldwell said a good portion of her clients come in through probation or parole.

Stillwater Counseling offers individual counseling and driving under the influence counseling and works with adolescents and families alike.

“We do women’s groups for addiction, and we do after care for in-patient treatment so when they come out they have a place to continue their recovery,” Caldwell added.

“My hope is that we can be a support network for people in the community.”

Stillwater Counseling is located at 929 Grand Ave. in Glenwood Springs.

How’s Business?

Every week, we’ll check in with a Garfield County business to see, well, how business is going. Through these stories, we hope to share stories of challenge and success and help our community gain a more qualitative picture of how our local economy is faring. Have a business you think we should check in with? Contact reporter Shannon Marvel at smarvel@postindependent.com.

Reporter Shannon Marvel can be reached at 605-350-8355 or smarvel@postindependent.com.

Bankers’ Hours: Once upon a time in the ’80s

This column was a fun one to write. Here’s hoping it’s a bit fun to read. It deals with about seven years in the 1980s that were one of the wildest periods in the financial history of the U.S. When the dust settled at the end of the decade, 504 savings and loan associations (thrifts) had gone broke, and some 403 thrift executives had been convicted in criminal activity. The debacle cost the U.S. taxpayers a bundle.

But, if one enjoys watching true crime in the act of commission, it was a hoot. In the aftermath, extensive and draconian statutes and regulations were implemented to make sure it never, ever happens again (snicker).

Ronald Reagan had barely lowered his right hand after reciting the oath of office when the administration began deregulating just about every business and industry in sight, and none was more ripe for a new regulatory structure than the S&L business. It was a segment of the banking industry with its feet firmly planted at around 1850. Up until the late 1970s, thrifts couldn’t even accept checking accounts; depositors could open only savings accounts or certificates of deposit.

Lending consisted of mortgages on real estate, and most of those involved single family homes and condos. Many institutions, and some of the biggest, weren’t even owned by stockholders; they were “mutual institutions,” meaning they were owned by the depositors and borrowers. All federally chartered S&Ls were mutual entities.

Then along came Reagan, and the savings and loan business emerged from the 19th century into the blinding light of the last third of the 20th.

Suddenly, an S&L could form a so-called service corporation, own 51%, and invest in a dazzling variety of enterprises. Mutual thrifts could convert to stock institutions, resulting in windfalls for depositors, borrowers and management. And, finally, some very neat accounting maneuvers called regulatory accounting — that were very different from generally accepted accounting principles (GAAP) — made buying a thrift exceptionally attractive. All of these goodies were laid out on the buffet table, and the line to dig in quickly formed. A lot of those waiting were financial cowboys who quickly spotted the potential for quick money, many from Texas. And those good ol’ boys knew each other well. It was an elite club, but easy to join; all you needed was your very own savings and loan.

The service corporation vehicle enabled them to partner up with other entrepreneurs and invest in just about anything. The poster children of this particular scam were Don Dixon and Woody Lemons, the owner and president respectively of Vernon Savings in Vernon, Texas, a small, conservative operation until Dixon bought it. The bank, through subsidiaries, then bought a string of luxury car dealerships, a beach front estate, and no less than three corporate jets — just to name a few assets and investments that used bank money for acquisition. Not exactly single family residential lending. Both Don and Woody were convicted of bank fraud.

Dixon employed a common tactic when he bought Vernon S&L. He kept the existing board of directors in place and pampered them with emoluments beyond their wildest dreams: junkets to conventions on the exec jets, with five-star accommodations and food. And weeklong get aways to the southern Cal beach property, complete with plenty of food, drink and professional ladies strategically placed. Well, not all the directors: The board had one woman, and she was never invited to the latter retreat.

Regulators during examinations were at first intrigued, and then shocked by the relationships between bank owners. As the examiners followed the interlocking tendrils spreading throughout the west and southwest, they dubbed it “The Daisy Chain.”

One bank owner would have a deal he wanted to fund, but his regulatory loan limit was, say, $4 million. No problem; he’d just pick up the phone: “Bubba, this is Jim Bob. Got an $8 million deal here, need a $4 million participation from your shop.”

“No problem, Jim Bob. By the way, my boys brought in a big deal, and I’m short about $2 million. S’pose you can help me out?”

“Sure can. Y’all take care.”

That’s what they called “Texas underwriting.” Big commitments were made on no more than a two-page deal sheet, just a very brief outline of a complicate transaction.

Since a bank’s loans to owners, officers and directors are limited and closely scrutinized, they sought to avoid regulatory sanctions by the Texas two-step of lending to each other.

I got an opportunity to see some of this up close and personal in the late ’80s when I was between banking gigs. The state S&L commissioner of Kansas called me to see if I’d take on managing a failed thrift in Liberal, Kansas. Kansas state law required that the commissioner’s office take over running any insolvent S&L until it was formally closed by the feds.

The operation was a small one, but the Texan that had bought it had been busy, making commercial and development loans in Texas and Oklahoma. Part of my job was to check these out; one, in the Dallas area, I remember well. It was a “luxury” subdivision built around a landing strip for private aircraft, although it’s doubtful whether a plane ever did, or could, land there. It was a desolate scene, and the smell wasn’t that great either, due to the sewer system backing up.

The motivation for all of this was, of course, money. Big fees were paid by developers and others to get the loans, and millions were pocketed by thrift owners and management in flipping properties between subsidiaries and outside entrepreneurs. One limited partnership that I heard about was called MLOMRQ LLC — “Make Lots of Money Real Quick.”

You really couldn’t make some of this stuff up. But it was only the tip of the iceberg.

George Bailey, as played by James Stewart in the classic Christmas movie “It’s a Wonderful Life,” has become the prototype small town savings and loan manager. There were a lot of George Baileys caught up in the the chaos of the S&L meltdown. They weren’t crooks, or didn’t start out to be, although a few did end up indicted. Others simply fell into the rapids of loans going bad, and ended up going over the falls of insolvency. In the next column, we’ll continue the common thread of the elements that have contributed to the last two banking crises, just 18 years apart.

Stay tuned for “It was a wonderful life … for a little while.”

Pat Dalrymple is a western Colorado native and has spent more than 50 years in mortgage lending and banking in the Roaring Fork Valley. He’ll be happy to answer your questions or hear your comments. His email is pdalrymple59@gmail.com.

How’s Business: Despite pandemic, All Dogs and Cats Veterinary Hospital successfully opened second location in New Castle

Owner and veterinarian Dr. Lori Pohm checks out a patient at the All Dogs and Cats New Castle location.
Chelsea Self / Post Independent

All Dogs and Cats Veterinary Hospital opened a second location in New Castle two months into the COVID-19 pandemic in May 2020.

Dana Gonzalez, practice manager of the hospital’s locations in Glenwood Springs and New Castle, said it was a crazy time for veterinary clinics and hospitals throughout the nation.

The waiting room at the All Dogs and Cats New Castle location.
Chelsea Self / Post Independent

“We experienced a boom in business,” Gonzalez said.

“The increase in hospital visits stemmed from pet owners having more time to be around their animals. People were staying home with their pets and noticing they didn’t feel good and maybe they decided it’s a good time to take them in. Many people acquired new pets as well because they were able to stay home.”

The only inconvenience of opening during a pandemic was bringing animals in while their owners waited at the curbside.

“It was difficult with a new location and people not being able to come inside. … When people are sitting outside, they’re kind of wondering what’s going on.”

On the inside is a different story.

“We actually have a really nice facility down there,” Gonzalez said.

“We have a comfort room, which is a really nice option for people to have for a euthansia procedures. We don’t have that here at our Glenwood Springs location.”

The comfort room at the All Dogs and Cats New Castle location.
Chelsea Self / Post Independent

The comfort room offers a comfortable couch and floor for owners to sit with their pets during those last precious moments together.

Dr. Annie Schmidt is the new veterinarian at the New Castle location. Schmidt offers acupuncture services for pain management or conditions with lameness, Gonzalez said.

In addition to their canine and feline clients, the hospital is now treating pocket pets, such as bunnies, rats, mice and hamsters.

“That is an important thing — getting rabbits spayed or neutered,” Gonzalez said.

All Dogs and Cats Veterinary Hospital locations:

• 6420 County Road 335, Unit A in New Castle

• 1607 Grand Ave., Unit 11 in Glenwood Springs

How’s Business

Every week, we’ll check in with a Garfield County business to see, well, how business is going. Through these stories, we hope to share stories of challenge and success and help our community gain a more qualitative picture of how our local economy is faring. Have a business you think we should check in with? Contact reporter Shannon Marvel at smarvel@postindependent.com.

Reporter Shannon Marvel can be reached at 605-350-8355 or smarvel@postindependent.com.

Personal Finance column: Perennial applications for vintage financial wisdom

“Too many people spend money they haven’t earned, to buy things they don’t want, to impress people that they don’t like.”

— Will Rogers

“Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.”

— Charles Dickens

“Budget: a mathematical confirmation of your suspicions.”

— A.A. Latimer

Replace your budget with an intentional spending plan. Tell your money where to go instead of asking where it went. Connect with your core values on what is important in your life and direct the financial flow. You won’t be swayed by media or the perceived “fear of missing out.” Spending with joyful intention within safe boundaries is a powerful combination.

“Everyday is a bank account, and time is our currency. No one is rich, no one is poor; we’ve got 24 hours each.”

— Christopher Rice

Consider that return on life is just as if not more important than return on investment. Money is very necessary up to a point. There is a diminishing rate of return on happiness as it pertains to income. Each person has their unique narrative to live a life on purpose and in their potential. Put forth effort and energy toward people, activities and causes that make you come alive. Using your financial means to pave this path is where you create true wealth.

“A nickel ain’t worth a dime anymore.”

— Yogi Berra

Inflation is an integral part of life. Flash back to 1970 prices: a home, $26,600; a first-class stamp, 6 cents; a gallon of gas, 36 cents; a gallon of milk, $1.15. You can either seek to outpace the cost of living — save and invest in broad-based, diversified, tax efficient portfolios (such as real estate and the stock market) for long-term goals. Or you can reduce your lifestyle and choices down the road.

“The Stock Market is designed to transfer money from the active to the patient.”

— Warren Buffett

Investing is different from speculating. Investing requires vision and a long-term focus, goal setting, good habits and mindsets. It is necessary to keep emotions in check and where wisdom undergirds and directs knowledge alongside application.

“Happiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort.”

— Franklin D. Roosevelt

“If money is your hope for independence you will never have it. The only real security that a man will have in this world is a reserve of knowledge, experience, and ability.”

— Henry Ford

These two both speak to the importance of character assets. Too often financial assets are the singular measure of “wealth.” Your net worth does not define your self-worth. When you focus on building and enhancing positive, productive character traits, the financial pieces will stay in their proper place to serve you and society.

“We make a living by what we get, but we make a life by what we give.”

— Winston Churchill

Generosity is the secret sauce in creating true wealth. It is foundational for financial health as giving breaks the bind of consumerism. It is a profoundly personal journey and worth taking steps on the path.

With over 2,000 references in the Bible about money, this one is the most misquoted and misinterpreted: 1 Timothy 6:10 – For the love of money is a root of all kinds of evil. Money is not in itself evil, but when it becomes the focal point of life either because of unsatiable desires or life-sustaining scarcity, immorality can bloom. The garden of your financial life needs to be well tended to keep this weed from taking hold.

“Money is a terrible master but an excellent servant.”

— P.T. Barnum

“Master Card” – the irony is palpable. If used wisely, it is a tool of convenience and safety. For many, consumer debt has been normalized and expected, yet holds them hostage from attaining financial freedom.

“Do what you can, with what you have, where you are.”

— Theodore Roosevelt

To me, this speaks to financial efficacy. We are not victims of financial circumstances. We get to choose — whether it is regarding the financial means you have or the mindsets you embrace. We can plan. We can save and invest. We can work hard. We can choose an attitude of gratitude and a mindset of sufficiency. We can recalibrate and pivot when things don’t go the way we had hoped. Where do you have wins and how do you want to build on them?

Danielle Howard is a CFP® and CKA® with Wealth By Design LLC in Basalt. Check out her retirement podcasts and blogs at daniellehoward4u.com.

Bankers’ Hours column: Banking changed in 1985

I recently read of the woes of Credit Suisse, the Swiss banking behemoth with a planetwide presence, which recently received a devastating one-two punch. The bank took a loss of $1.5 billion as a result of the failure of Greensill, a non-institutional lender with operations on four continents. And then, in just weeks, Archregoss Capital Management, a very big borrower from Credit Suiess, imploded, and the bank is now facing another $5 billion hit to capital.

So Credit Suisse is going broke, right? Nope, they’ll be fine, because of the profit they post from other divisions of their rather extensive platform; net income for 2020 was $2.7 billion.Things are going quite well for banking as the industry emerges from the bunkers into the post-pandemic landscape. Oh, the bank will have regulators from at least two countries on their case, and a lot of top execs will get fired or take early retirement.

But I was struck by the details of the two problems, and it came to me I’ve seen this movie twice before. I realized that there have been three great systemic bank failures of the last 100 years — the collapse of the Great Depression, the S&L Crisis of the 1980s, and the Great Recession of 2008 — and that I’d been a witness and on the front line of the last two. Those events have a remarkable similarity, and an epiphany of sorts struck me: We bankers are no different than anybody else. We all fail to heed the famous quote of George Santayana, the American philosopher and writer: “Those who cannot remember the past are doomed to repeat it.”

So in the next several columns, let’s take a look at 1985 and 2008, and, just for fun, throw in some real life anecdotes to spice up the story. And speculate, can it, will it, happen again? If one were to venture a premature response, “yes” to the first question and “who knows?” to the second.

Ronald Reagan was elected president in 1980, and the administration was committed to deregulation in all federal venues, and particularly in banking. Savings and loans, (thrifts) became the poster child for rewriting bank regs, primarily because they were arguably the most regulated business in the country. These institutions made only real estate loans, and most of those were single-family residences. They were stodgy relics from the 19th century, and thrift execs tended to adhere to the 3/3/3 rule: Pay 3% for your savings accounts, mark up the money by 3%, make home loans, and be on the golf course by 3 p.m. They were dull in the extreme. And they seldom went broke.

That changed with Reagan. Thrifts could make more types of loans, and S&L presidents could act like what they’d always wanted to be: bankers.

And then there was the direct investment concept, a radical reworking of those old Victorian-age thrift rules. Through a so-called service corporation, of which the S&L had to own at least 51%, thrifts could step out of the role of lender into a new suit of clothes labeled “entrepreneur.” They could get directly into land development and construction projects as developers and builders and make a lot more than a 3% spread on deposit money.

It was common for a thrift to take on a builder as a partner for the other 49% of the enterprise. For their part, builders thought they’d died and gone to heaven. “You mean I don’t have to borrow from a bank, I can partner up with one? Yahoo!”

It didn’t take long for entrepreneurs on the cutting edge to wonder, “Hmm. … Why be a partner with a bank? Why not, well, be a bank?”

You smart ones in class probably know where this is going. Stay tuned for the next episode. …

“Cowboys and daisies.”

Pat Dalrymple is a western Colorado native and has spent more than 50 years in mortgage lending and banking in the Roaring Fork Valley. He’ll be happy to answer your questions or hear your comments. His email is pdalrymple59@gmail.com.

 

Bankers’ Hours column: What a personal guarantee on debt really means

As the pandemic passed its one year anniversary observance, a lot of entrepreneurs and business owners are learning firsthand what a personal guarantee on debt really means.

Most likely, it means that someone is demanding that you pay them money that you don’t have the means to pay. You personally promised to repay a loan to your business. But your enterprise has been either shuttered for months or operating at 50% of capacity or less; thus, there isn’t enough revenue to service the debt.

Doesn’t matter, says the lender: When you signed the docs, you affixed your signature agreeing that you’re on the hook, no matter what happens to your business.

Personal guarantees are common when borrowing money or leasing property to operate a business. We’ll focus on borrowing in this space today.

Unless your name is, say, Microsoft, Facebook or Apple, a condition of your business loan will almost certainly be your personal guarantee. For a small business operator, that can be devastating, because often no money has been taken out of the operation as the owner desperately tries to keep the ship afloat; the personal checking account may be as depleted as the store operating bank balance.

Banks, credit unions and thrifts (savings and loans) routinely require the personal signature, no exceptions. They want “skin in the game,” and bank examiners expect it. These lenders require it even from very good deposit and loan customers. Maybe, rarely, they’ll waive the contingency if a borrower puts up additional collateral for the loan, and cash is often the only option. If the bank backs away from spreading ink on the promissory note, it could demand, say, 75% of the loan amount in cash in, maybe a pledged CD that would immediately be applied to the loan on default by the borrower.

Which, of course, prompts the borrower to say, “What? Why would I want the loan if I have to tie up all of my cash!” Whereupon the loan officer smiles sweetly, responding, “Exactly, Mr. Smith. So just sign here on the note, and you can continue to keep your cash right here at the Second National Bank of Downriver Montana and withdraw it anytime you like.”

What about hard money lenders? They look at the collateral’s value, so they can forgo the guarantee with a conservative loan to value ratio, right? Generally, the answer is no. They too want that skin in the game. I’ve had discussions with some HMLs and heard some posit the possibility of redundant over-collateralization, such as, say, 20% LTVR on a piece of buildable land, maybe 45% on a free and clear rental property and possibly a lien against debt free equipment, but I’ve not seen such a scenario becoming reality.

In fact, at times, the hard money people can seem downright conservative, especially in a hot real estate market, like we’re currently experiencing. Many of these private lenders remember too well 2008, when 50% loan-to-value deals virtually overnight became 90% loans, and then, shockingly, deals that were way below water at 110%. So a lot of HMLs are hedging their bets, especially on super-jumbo residential properties that investors might be purchasing to flip. Some hard-headed capital sources are wondering if the Greater Fool Theory is not morphing into the Law of the Greater Fool: You know, “I’m a fool to pay this much, but I’ll find a Greater Fool to pay more.”

So one of these lenders might get a request for flash cash to buy a luxury home in Vail, with three contracts waiting to step up if the first buyer can’t meet some clause in the contract. That lender may decide not to rely on the contract price, or even a current appraisal. Rather, there may be an underwriting decision to ratchet down the value, maybe by checking the county assessor’s last “actual value” estimate, which most likely is quite a bit below the current hot market sales price.

We laugh at the joke that lenders want your first born as additional collateral.

But they would if they could.

Pat Dalrymple is a western Colorado native and has spent more than 50 years in mortgage lending and banking in the Roaring Fork Valley. He’ll be happy to answer your questions or hear your comments. His email is pdalrymple59@gmail.com.

ANB Bank downtown Glenwood construction on track to wrap up in November

Crews continue work on the new ANB Bank in downtown Glenwood.
Chelsea Self / Post Independent

After some initial delays, the new ANB Bank site on Grand Avenue in downtown Glenwood Springs is set to open at the end of 2021, according to Glenwood Springs Community Bank President Randy Diers.

“We had some initial delays due to soil issues. By the end of November the building should be delivered to the bank from Neumann Construction,” Diers said. “Then it takes about a month to equip it properly.”

Until then, the Glenwood Springs ANB Bank branch will continue operating out of its location at 2624 Grand Ave. on the south end of town. The Glenwood Springs Planning and Zoning Commission voted to approve ANB Bank’s construction plans in December of 2019.

In May of 2019, ANB Bank purchased the properties at 910 and 918 Grand Avenue with the intent of demolishing two circa-1915 buildings in order to construct a 9,706 square foot, two-story bank and office building.

That was met with opposition from some community members and existing business owners located in the two buildings. ANB provided financial assistance and helped the businesses find new locations to ease the transition.

Diers said he’s excited to get started in the new downtown location.

“We’re going to have better visibility, better access closer to the core and to the heart of Glenwood Springs,” Diers said. “We will close this location (at 2624 Grand Ave.) and have the new location with convenient parking.”

Diers said ANB Bank is a full service community bank offering full consumer financing and account packages, as well as commercial business services.

“Right now we have a lot of loan activity due to urban flight,” Diers said. “We continue to see people buying loans for new houses and home construction. It’s been very, very busy.”

With the new location, Diers anticipates keeping the staffing numbers the same and will add staff if there’s a need to do so.

Reporter Shannon Marvel can be reached at 605-350-8355 or smarvel@postindependent.com.