Attorney Patrick Guida was recently elected as a fellow to the American College of Commercial Finance Lawyers. He’s the organization’s only Rhode Island member.
Election to the ACCFL is awarded to lawyers whose principal practice is in commercial finance law. Guida said ACCFL members must have establish preeminence in the field and must have made substantial contributions to the promotion of learning and scholarship in the field through teaching, lecturing or published writings. He is a partner at Duffy & Sweeney’s Providence office.
PBN: How have things changed over your 30 years in commercial finance?
GUIDA: My early years were spent as in-house counsel at Society National Bank (a predecessor to Key Bank), Rhode Island Hospital Trust National Bank and BankBoston (predecessors to Fleet and now Bank of America). I firmly believe that there is no better training ground for learning about commercial bank products and services than the commercial lending group within the legal department of a major bank.
Throughout the last 30 years, the banking industry was deregulating and consolidating, and the products offered were expanding geometrically. We saw a wealth of different initiatives and credit-facility opportunities that resulted in successful projects, many of which are still with us today. Upon returning to private practice, I was fortunate to have been involved, from the developer side, in the Convention Center Authority, Providence Place mall, Waterplace Park, and renovation of the Civic Center, now known as the Dunk. In the last decade, we saw the explosion of asset securitizations, including mortgaged-backed securities. That made credit more readily available, but created its own very serious problems as we now know all too well.
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PBN: How has the economy impacted commercial finance and real estate finance transactions in recent years?
GUIDA: The projects have certainly changed over the last few years. In the late 1970s into the mid-1980s, industrial development bonds (IDBs) were the favored facilities for development and expansion of brick and mortar and equipment purchases. Changes in the tax laws made IDBs less favorable and equipment leasing more popular. That said, when it is good fit, we continue to work with banks in both the structuring and purchase of tax-free industrial revenue bonds, which increase the viability of financing and, ultimately, create jobs.
In the go-go days of historic tax credits, there were many opportunities for creative rehabilitations of rundown and abandoned sites. One of my favorite rehab projects involved a dilapidated, underused property that today houses a creative community with an eclectic mix of artists and entrepreneurs in one of the largest mill restoration projects in Rhode Island. The project brings the fine arts and independent small businesses together under one roof. While the historic tax credit program in Rhode Island has been shut down, the federal historic tax credit opportunities remain available.
PBN: What are some of the key developments in the banking world, from your point of view as a commercial finance lawyer?
GUIDA: There appears to be no shortage of news in the banking world with new players, acquisitions, name changes and other never-ending developments. Over the last few years, the financial industry has undergone a serious retrenchment and is now reemerging with a richer array of financial products to encourage growth and development. Many of the seasoned bankers who have contributed their time and energy to the major projects that shaped our state’s infrastructure over recent decades are still actively in the mix. Our state’s established lenders are vigorously looking to help businesses expand, albeit with added scrutiny and oversight.
One project in which I was recently involved leveraged this newfound array of financial options to allow a local company to accomplish local expansion of its industrial business using a tax-free industrial revenue bond financing for the purchase, renovation and equipping of a substantial industrial facility. Today, the facility is successfully up and running and employing more people. Moving forward, I anticipate continued expansion for this type of business and foresee credit resources available to leverage other new-business opportunities.
PBN: How should a savvy businessperson proceeding in these challenging times?
GUIDA: Lending and commercial finance is undoubtedly becoming more complex, and there are a growing number of sophisticated commercial finance tactics and products to promote business. Even existing banking products like standby letters-of-credit are now being used in more creative ways to make a deal feasible. They are becoming more popular because they serve as an alternate form of payment guaranties, product warranty enhancements, and even as a substitute for subordination and inter-creditor agreements. With some creativity these products can provide flexibility and a broader array of ways to accomplish a business person’s financial objectives.
My advice to business owners looking to obtain financing for any purpose is to work early and closely – intimately even – with your financial team. That team may be comprised of bankers, venture-capital gurus, lawyers and CPAs. There is no doubt that the contributions from a company’s very own thought-leaders will reap tremendous rewards in the financing process.
PBN: Your induction into the American College of Commercial Finance Lawyers was last month. How many new members were elected?
GUIDA: The official induction ceremony was held on April 16 at the Algonquin Club in Boston as part of the American College of Commercial Finance Lawyers’ annual meeting in conjunction with the American Bar Association Section of Business Law annual meeting. Thirteen new members from across the country were elected that evening to the membership of approximately 225 fellows. One might think that a gathering for a bunch of commercial finance lawyers would be a bit dreary but it was a very moving experience, particularly given my longstanding admiration for so many of the other veteran fellows.
