Signature Bank Holds Taxi Drivers Hostage, But What If They Still Can’t Pay?

“[Signature’s]…middle-market expertise includes transportation, even financing taxi medallions.

[Joe DePaolo, president and CEO said:]

We lend to businesses that have collateral that we call ‘hostage collateral. That means, if it’s an ambulance company, you’re lending to the ambulances. If it’s a construction company, you’re lending to the equipment, because they couldn’t continue their business without their equipment. So in all likelihood, they’re going to pay those bills first because it’s their lifeline to growing and keeping and sustaining their business.

This is also why he and analysts don’t expect the taxi medallion business, which is about [2%] of Signature’s lending, to be as big a worry as portrayed by the media. The taxi permits have come under pressure because of the emergence of Uber and other cab competitors…”

Got Irreplaceable Collateral? Signature Has Your Loan
By Marie Beerens
Investor’s Business Daily
October 22, 2015

 

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