With global markets in disarray, election year uncertainty and central banks entertaining negative interest rates, the only people feeling certain about the national economy likely don’t read the news.
So it wasn’t surprising when San Francisco-based MUFG Union Bank’s annual small-business economic survey reported last week that the majority of Los Angeles County small-business owners feel the national economy is headed in the wrong direction. They are also split about the climate for their companies in 2016, but the vast majority still feel their own businesses were headed in the right direction.
“It says a lot about the optimism of L.A.,” said Todd Hollander, managing director and head of business banking for Union Bank, who is based in Irvine but spends the majority of his time in Los Angeles. “I’ve been doing business here for a long time. It’s a hotbed for entrepreneurship.”
Granted, optimism is likely just part of the respondents’ DNA, Hollander said. As self-employed business owners, they probably have more confidence that they can deliver on their own versus working for a bigger company.
For the survey, small businesses were defined as having $15 million or less in annual sales. Respondents had to be over the age of 25 and their firms had to have been in operation for at least two years.
The overall survey polled more than 650 business owners in California and the Pacific Northwest, including 182 in Los Angeles.
The economic concerns of Angelenos include interest rates and the fate of the Affordable Care Act in the wake of the pending election. More than half of small-business owners in the county responded that they’re unprepared or don’t know if they’re prepared enough for interest rate changes. Among election year issues, 42 percent of L.A. participants said Obamacare would impact their business the most. But a majority said that to date, the health care law has not negatively affected their bottom line.
Although L.A. small-business owners didn’t exhibit as much optimism as in last year’s study and haven’t been hiring as much, they haven’t been laying off people either, Hollander said.
“Anytime you have an election year, especially this election year because you have a president terming out, you’ve got more concern and more uncertainty,” Hollander explained. “Coupled with global unrest, what’s going on in China, you really are creating an environment where business owners are more unsure (about the economy) but more confident in their ability to deliver.”
Banking on Health Care
Bank of the West has launched a dedicated health care banking team based out of downtown Los Angeles. The San Francisco bank’s new initiative is being run by recently appointed Managing Director Sean Conlon, who previously led health care finance at Union Bank.
The new squad will serve both nonprofit hospitals and for-profit providers such as hospitals, med-tech firms and pharmaceutical companies.
“The health care sector in the U.S. is undergoing significant transformation, marked by growth, complexity and the increasing need for financing solutions,” said Jean-Marc Torre, Bank of the West’s commercial banking group head, in a statement. He added that establishing such a dedicated team would augment the bank’s ability to serve that sector.
Conlon said the bank chose to base the initiative in Los Angeles because the lender has a lot of infrastructure here.
“This is an optimal time for Bank of the West to deepen our expertise and better serve companies in this expanding sector,” he wrote in an email, noting the bank has more than $1 billion in commitments in the industry.
Finalized Funds
Westwood alternative investment firm Shamrock Capital Advisors has announced the final closing of a $700 million fund focused on providing buyout and growth capital investments within the media, entertainment and communications industries. … Beverly Hills-based real estate investment firm Kennedy Wilson announced it has completed fundraising for a $500 million U.S. fund.
C-Suite News
Pasadena’s Community Bank has appointed Robert J. Kushner and Matthew Denmark to its board. … Century City’s Saban Capital Group Inc. has promoted Senior Vice President and Chief Investment Officer Philip Han to executive vice president. … Bank of the West’s wealth management group has promoted two bankers in the L.A. market. Based in downtown Los Angeles, Rachel DeLauro is now senior vice president and market leader responsible for L.A.-area markets. Jack Keleshian, in the Pasadena office, has been named senior vice president and will continue serving as Pasadena market leader. … Maria Ruppert–Pappas has joined the downtown L.A. office of San Diego-based Torrey Pines Bank as vice president and senior real estate loan officer.
Staff reporter Marni Usheroff can be reached at [email protected] or (323) 549-5225, ext. 229.
