President’s Message (July 2024)
To quote novelist, short-story writer and screenwriter, John Irving, “Being wrong about important things is exhausting.” And as of the writing of this Letter, let’s just say I’m exhausted. In my January Letter, I reported that we ended 2023 at pre-COVID levels and that we were projecting an even stronger 2024. So far, 2024 has not lived up to anywhere near that projection.
New business was quite robust in the first quarter; we had a fair amount of activity and funded some very nice-sized deals. But midway through March, it began to slow down. Fortunately though, new business activity started picking up again in early June.
We have continued to fund some great deals, but interestingly (for want of a better word), we’ve seen a number of deals for which we issued proposals, ushered them into and through due diligence and ready to sign loan documents when the prospective borrowers changed their minds. The deals were almost through the process and then the slow dancing began – we were told, “We’re going to do something different.” I don’t know what that “something different” was, and there’s no connecting thread among the deals to figure it out. I’ve kind of been scratching my head on this one.
Our clients have been experiencing cash flow problems for a while now but lately, that has intensified. This is the toughest time we’ve seen in our portfolio since 2008 and we’re doing what we can to help our clients get through it.
Coming into the year I was so optimistic, but it’s just not been as active a year as I expected and yes, it’s exhausting. Some say they’re waiting for the election for things to get better and with only a few months to go, we’ll know if that’s true or not soon enough.
Operationally, we’ve decided to expand our Sales team and are looking in the Southeast. Other than that, we’ve had no personnel changes, nor do we anticipate any.
I can honestly say I have no idea how the rest of the year is going to pan out, but I am optimistic that the June resurgence will continue and we’ll see an active second half of the year. The fourth quarter is always our busiest; hopefully, that will be the case again this year.
I wish I could say this is the best year ever but being wrong about important things is exhausting and I don’t want to chance that again. So, I won’t try to predict the future; I’ll hope and work for a better second half of the year, and wish that for all of us!
Mark Hafner
President & CEO
Celtic Capital Corporation