If there is one lesson that stands out from 2008 about banking, it can be summed up in one word- timing.

Equity markets have been thought to have more peaks and valleys.  IPO, private equity, angel and other equity markets can be feast or famine.  

But banks had always been thought to be in the market.  If you had a good enough company, there would almost always be some bank at some level willing to finance you.

That changed in 2008.  By the fall, the market had mostly dried up.  Deals that could breeze through committee during the summer were now getting early turndowns.  Many banks just effectively shut down new lending for the rest of the year.  Many turned their focus inward, making sure they were covered OK with their current portfolio.  They were busier trying to see who might be the next problem account that might move into workout.  They may have been heavy in some sectors that really went south like real estate or retail.

Others were waiting on the government.  Should they apply for TARP money?  Then it turned into a rush.  The money from the government was going to be cheap.  They might as well go for it.  Besides, if they did not get TARP money, it might be a signal that something was wrong.  TARP became like a Good Housekeeping or Underwriter’s Laboratory seal of approval.

Getting TARP was no guarantee a bank would loan money.  While TARP could be an accelerator, there was a brake being applied as well- uncertainly about reserve requirements.  It became like driving a car with your foot on the accelerator and the brake at the same time.

It did not dry up completely.  Some loans were still getting made.  A few, but not many banks were still in the game.  But the criteria stepped up and the rates went higher.  

If looking for new bank money, you might have to go out sooner, if the market is still open.  I know a company that went out in the fall of 2008.  If they had gone out in the summer, it would have been an easier deal.

If you have a loan coming up for renewal, consider negotiating earlier, if it looks like your renewal might come in at a bad time.  Companies whose loans came up in late 2008 or early/mid 2009 certainly fall in that boat.  If they have waited, they may be in for a tough renewal and have to hit the street at one of the worst times ever.