Small Business to Murray: Give Us Some Credit

The Silverdale chamber organized this event, by the way. Rachel

By Rachel Pritchett
Small-business owners told U.S. Sen. Patty Murray on Monday that banks stingy on lending have threatened their survival and frustrated expansion.
Sen. Murray, D-Wash., met with several business people at a Byron Street bakery, and said her legislation to redirect $30 billion in Troubled Asset Relief Program funds to community banks would help.
The smaller banks would use the money to erase bad foreclosure debt. With the cleaned-up books and improved capital, they could start lending again, according to the theory behind Senate Bill 2867. Murray’s proposal is in committee. Sen. Maria Cantwell, D-Wash., has upped Murray’s amount to $50 million and is asking President Barack Obama to bypass Congress to get the money to community banks fast.
Murray sympathized with the business owners.
“The blockades that you’re facing today (are) not of your making,” she told them.
At least for those meeting Monday, they’ve been huge.
Brad Moore of Creekside Cabinets & Design of Silverdale said his business is only two-thirds of what it was prerecession. Since banks won’t lend to his contractor customers, he’s become the bank, extending them credit.
He’s had to pare staff and now fears that a mass reset of adjustable-rate mortgages coming later this year will deliver him yet one more blow.
“I don’t know how in the world we got here,” he told Murray.
Monica Downen of Monica’s Bakery & Café of Silverdale said she’s watched Old Town businesses “quietly go away.” Her bakery, too, is in tight straits. At one point, she went to a bank to see if she could consolidate her loans.
“And they wouldn’t even talk to me,” she said.
Hanah Reed of The RockIt Roost, a Silverdale boutique, said she was “humiliated” when she asked banks for startups help. They didn’t want to give her their time, and didn’t want to look at her business plan, said the former mortgage lender.
“In my situation, startups business, who’s going to look at me?” she said.
Amy Igloi-Matsuno of Amy’s on the Bay restaurant of Port Orchard said that she tried to get a $27,000 bank loan for a new business vehicle.
“And the bank turned us down,” she said.
The business owners
said they’re using Facebook, Twitter, special events, promotions and teamwork with suppliers
to market themselves through the recession.
“I’m throwing everything against the wall, and see what sticks,” Downen said.
A few also are getting support from private backers, rather than banks.
“It just seems like if you don’t have that ‘in’ with somebody who has money, you can’t expand,” Igloi-Matsuno said.
Community banks, which have less than
$10 billion in assets, make up about 90 percent of all banks and have been reluctant or unable to lend while holding record numbers of bad loans. They are under much more scrutiny by the Federal Deposit Insurance Corp.
In 2009, lending by community banks was down 7.5 percent, according to the FDIC.
Some in community
banking were hopeful Murray’s effort might help.
“Capital is king in today’s market,” said Bill Fogarty, president of the new Liberty Bank of Poulsbo.
He said his bank — started in the recession after the collapse of the housing market already had shackled other banks with non-performing loans — still has money to lend.
John Collins, president of the Community Bankers of Washington, hoped something akin to Murray’s effort comes fast.
“Any help would be greatly appreciated,” he said.

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