U.S. banks tighter on business loans

Published: July 28, 2008 at 8:48 AM

WASHINGTON, July 28 (UPI) -- Tighter credit hasn't only affected U.S. consumers looking for a house but companies are also finding banks holding back, official reports show.

Banks have cut back almost 3 percent in the past year in lending commercial and industrial loans and 270-day "commercial paper" loans, generally used for inventory purchases or for working capital, the U.S. Federal Reserve Bank reported.

The decline from $3.36 trillion to $3.27 trillion is the largest annual decline in these loans since 2001, The New York Times reported Monday.

"Access to capital and credit is essential to growth. If that access is restrained or blocked, the economic system takes a hit," said Michael Darda, chief economist at MKM Partners in Greenwich, Conn.

The numbers are tangible for Drew Greenblatt, president of Marlin Steel Wire Products.

His company, which makes parts for appliances, is profitable and is expanding. But, when he asked Wachovia bank for a $300,000 loan to purchase a new factory robot, which would have added three jobs at his plant, he told the newspaper was turned down.

"The exact words were, 'We're saying 'no' to almost everybody,'" Greenblatt told the Times.

© 2008 United Press International, Inc. All Rights Reserved.
Order reprints



Additional News Stories
Black Wednesday? Retailers extend deals (9 min)
Study: Oceans' intake of CO2 slowing (13 min)
Conscious man diagnosed in coma for years (13 min)
Sharks' Thornton is top player of the week (19 min)
Police tie S.D. Chargers player to brawl (25 min)
Home sale spike continues (27 min)
Wigan to give refunds after 9-1 loss (34 min)
fark
Doctors say rarely-performed "hemicorporectomy" procedure can add years to life of those who need...
Musicians on the road: the insanity, the groupies, the parmesan-crusted duck breast with balsamic...
Citing huge demand and turnout, NYC health authorities happily confirm .00143% of the city was vaccinated...
Half of drivers age 18-34 admit texting on the road; the other half reponded with ;)
If you're going to hide a sex offender at your home, maybe you shouldn't work for the State Police...
Budget cuts, office closures, and staff reductions may mean that visits to the DMV won't provide...