President’s Message (January 2023)
In my last Letter (July 2022), I was pretty upbeat which was a refreshing change from the previous couple of years. And even though deal flow in the second half of 2022 was slower than expected, I’m still pretty positive.
Drivers of what would have brought in more deals (inflation and rising interest rates) have taken longer to affect businesses. But as we moved closer to year-end, we’ve seen more of their impact. Add to that Bank of America’s projection of a soft recession in 2023 and Citibank’s expectations of a much worse recession, I think deal flow will pick up significantly.
As the environment in 2023 will become much tougher for businesses, (with banks more focused on credit quality and tightening credit), if will be very interesting to see which bank’s prediction is right. Either way, it should be good for Celtic Capital.
The two new members of our Sales Team that we brought on board last year, Anthony Gomez in our Pacific Northwest territory and Vincent Soto in our Mountain West territory, are both doing well. And we’ve recently added Tim Serritella to set up a new territory in the Central Midwest (Illinois, Iowa, Minnesota, Missouri, Wisconsin). This expansion brings our physical presence throughout the country to its largest in our history.
We purchased a small portfolio of equipment-only loans from a lender exiting the business. That area continues to be one in which we specialize.
All things considered – the inflation-driven economic situation, the expectation of tightening credit, a fully-staffed Sales team physically located across the country – I envision 2023 to be a good year for us and for the industry.
Wishing you a prosperous year,
President & CEO
Celtic Capital Corporation