The Silverdale chamber organized this event, by the way. Rachel
By Rachel Pritchett
rpritchett@kitsapsun.com
SILVERDALE
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.
