April Fool’s Joke Gone Awry

Apparently, you’re not allowed to joke about anything having to do with the banking industry these days. Chris Hurn and the team over at 504Experts.com (also an Inc 500 member) issued a press release yesterday that has created *a ton* of backlash in the financial communities.

Here’s the prank release…

NEWS RELEASE

Mercantile Capital Corporation Announces New Public-Private Partnership with Small Business Administration (SBA) and U.S. Treasury Dept.

Firm Set to Rename SBA 504 Loan Program as Part of Transaction

ALTAMONTE SPRINGS, Fla. — Mercantile Capital Corporation (formerly known as Mercantile Commercial Capital, LLC) chose its first operating day as a new entity to announce a landmark new federal program for the nation’s small business owners.

After months of closed-door negotiations with government officials, the Orlando-area based commercial lender has agreed to assume and service the small business loan portfolios of now defunct Wall Street firms, Lehman Brothers and Bear Stearns – both of which originated hundreds of millions of SBA 504 loans over the past decade. Moreover, for an undisclosed sum, Mercantile will be granted “preferential status” in providing SBA 504 loans nationwide and given “naming rights” for the SBA 504 loan program. In a unique “swap-arrangement” that demonstrates the Obama Administration’s creative spirit in working with the private sector and a need to raise revenues for the Treasury, Mercantile will maintain the servicing for these 504 loans, while the SBA confers to Mercantile the option to provide all SBA 504 first mortgages for the remainder of fiscal year 2009 and all of fiscal year 2010. Along with this groundbreaking exclusivity, Mercantile has 30 days in which to change the poorly named “504” moniker.

“This is obviously a very big day for Mercantile,” said Chris Hurn, Chief Executive Officer of Mercantile. “We spent a considerable amount of time and capital to negotiate this deal – to service what may turn out to be ‘toxic’ assets from failed financial institutions, but in exchange we’ll become the SBA’s exclusive provider of 504 first mortgages and get to rename the program for the next 18 months,” Hurn stated.

Hurn’s business partner and the Chairman of Mercantile, Geof Longstaff, was equally effusive, “Our standing as one of the nation’s leading 504 lenders positioned us as the ‘go-to players’ to get this deal hammered out. The government wanted experts like us to take care of these specialized loans and was willing to let us take the lead in thawing-out the frozen small business lending industry.”

“The fact that we’ll get to rename the SBA 504 within the next 30 days was simply icing on the cake for us,” said Hurn.

Treasury spokesman, Dr. Lopo Flairs, commented, “The new Administration has chosen to be more creative – to throw the proverbial box out the window. This deal with Mercantile is a good example, as it accomplished our administrative needs while raising needed funds. The fact that the 504 loan program will get a new name for a few years is actually a plus for all parties involved. No one really knows why it was ever called that in the first place. This situation is really not unlike naming rights to a professional sports stadium, NASCAR sponsorships on their cars, or European soccer players with logos on their jerseys. We believe this is a good deal for America’s taxpayers.”

Hurn said he hasn’t yet decided on a new name for the 504 loan program, but since the program champions America’s small businesses and entrepreneurs with the smartest financing available when purchasing commercial property, he is said to be leaning toward calling these loans “The SmartChoice commercial loans.” Acting SBA Administrator Daryl Hairston and the soon-to-be confirmed SBA Administrator, Karen Gordon Mills, are also working with Hurn to appropriately rename the program.

Hurn and Longstaff will be leaving early today to join the leaders of the G-20 Summit in a just-added presentation on international small business growth. President Obama invited these two small business loan experts to London to educate this illustrious group about successful small business wealth creation. Both men are expected back in Orlando by early Saturday.

SBA 504 loans offer small business owners up to 90 percent financing at substantially reduced rates to develop, acquire, and remodel commercial facilities.

Mercantile Capital Corporation, formerly Mercantile Commercial Capital, LLC, ranks as the one of the most active providers of SBA 504 financing in the nation and has become quite well-known and decorated in their industry with such honors as being a member of the Inc. 500 list of America’s fastest-growing companies, being named “Banker of the Year,” and just last year, being named “Best Small Company in Central Florida.”

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And here’s the retraction after everyone lost their minds…

NEWS RELEASE

Mercantile Capital Corporation Retracts Earlier SBA 504 Announcement

“Just an April Fool’s Day Prank to Release Some Tension,” says CEO

ALTAMONTE SPRINGS, Fla. — Mercantile Capital Corporation (formerly known
as Mercantile Commercial Capital, LLC) has retracted an earlier story about
its new public-private partnership with the U.S. Small Business Administration
(SBA) and the U.S. Treasury.

“Often times it’s better to laugh, than cry,” said Chris Hurn, Chief
Executive Officer of Mercantile Capital Corporation.  “There’s been so
much tension, anxiety and uncertainty over the past several months in the
financial services industry, that we played an innocent practical joke.
This is the very first time we’ve ever fabricated something, and we would
never do so on any other date.”

There are several things Mercantile wishes to recant:
-  There have been no closed-door sessions with the Obama Administration
and Mercantile officials, nor has Mercantile paid the Treasury an “undisclosed
sum” of money for a portfolio purchase of SBA 504 loans or for naming rights
to the program.

-  To the best of Mercantile’s knowledge, Bear Stearns never originated
or held a portfolio of SBA 504 loans.

-  Lehman Brothers, while originating tens of millions of SBA 504 loans,
did not sell these assets to Mercantile, nor were Mercantile officials aware
of any of Lehman’s SBA 504 loans being considered “toxic.”

-  Mercantile is not in the business of assuming and/or servicing loan
portfolios – they only originate SBA 504 loans nationally, one small business
owner at a time.

-  The U.S. Government, the Treasury Department, nor the SBA have granted
any exclusivity or other “preferential status” to Mercantile in regard to being
the only private-sector lender making SBA 504 first mortgages, much to Mercantile
officials chagrin.

-  Mercantile does not have license to rename the SBA 504 loan program,
despite its re-positioning of the program as “The SmartChoice commercial loan”
over the past year.

-  Acting SBA Administrator Hairston and soon-to-be confirmed SBA
Administrator Mills have not been in contact with Mr. Hurn regarding a name
change for the SBA 504 loan program . . . but perhaps they should.

-  Messrs. Hurn and Longstaff did not travel to the G-20 Summit this
morning – in fact, Mr. Hurn traveled to Cleveland, a far cry from London.

-  While Messrs. Hurn and Longstaff would be happy to educate governmental
officials (both domestically and internationally) about small business growth
and small business wealth creation through smart commercial property ownership,
neither men have been contacted by the Administration to do so.

-  Dr. Lopo Flairs is a fictional Treasury spokesperson with a name that
is an anagram, spelling out “April Fool’s.”

“We hope this joke did not cause anyone too much heartburn.  Anyone who knows
us, knows that we take our work very seriously and believe we really are the
best at providing SBA 504 loans to America’s small business community . . . but
occasionally we like to be a little irreverent.  Life is much too short to
always be serious,” said Hurn.

“If the Administration wants to seriously consider any of the provisions in
this morning’s press release to thaw-out the small business lending environment,
we would be happy to do our part,” said Geof Longstaff, Chairman of Mercantile.

Mercantile officials are reportedly working on giving all of the hundreds of
people who went out of their way to call in and/or email in to congratulate
them on their “fake” news some gift of appreciation for being such good sports.

SBA 504 loans offer small business owners up to 90 percent financing at
substantially reduced rates to develop, acquire, and remodel commercial
facilities.  Really, it’s true!

Mercantile Capital Corporation, formerly Mercantile Commercial Capital, LLC,
really does rank as the one of the most active providers of SBA 504 financing
in the nation and really has become quite well-known and decorated in their
industry with such honors as being a member of the Inc. 500 list of America’s
fastest-growing companies, being named “Banker of the Year,” and just last year,
being named “Best Small Company in Central Florida.”  Who else could have
pulled an April Fool’s stunt like this anyway?!?

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