Business Loans

Indicators Tuesday -- September pending home sales Wednesday -- October retail sales, Producer Price Index Thursday -- October Consumer Price Index, weekly jobless claims Friday -- October industrial production, capacity utilization Events Monday Veterans Day observance -- U.S. government bond markets and related financial commodities markets will be closed. Tuesday Small business opportunities in Dundalk -- Free information session by Lisa Fischer, owner of the Village Coffeehouse, presented by Community College of Baltimore County, Dundalk, 11:15 a.m., Village Coffeehouse, 3 Commerce St., Dundalk.

ATLANTA -- Pledging to spark more economic growth and prosperity among African-Americans, Vice President Al Gore yesterday announced a goal of $1.4 billion in new loans for black small-business owners nationwide, including developing a Baltimore center.The new loan initiative, to be administered by the Small Business Administration, will be buttressed by seven community development centers to educate black entrepreneurs. The announcement is timely for Baltimore, where City Council President Lawrence A. Bell III has spent months prodding area banks for more business capital in black neighborhoods.

The Bank of Annapolis in Annapolis and Home Bank in Newark in Worcester County topped a list of Maryland's most small-business-friendly banks in a new survey by the U.S. Small Business Administration.The annual survey, which focuses on small business loans of less than $100,000, identified 478 of the nation's 9,670 commercial banks as "micro-business friendly."Banks in the top 10 percent in small business lending in Maryland also include First United Bank and Trust Co. in Oakland; Industrial Bank in Oxon Hill; Bank of Glen Burnie in Glen Burnie; Peoples Bank of Kent City in Chestertown; Westminster Bank and Trust Co. in Westminster, and Talbot Bank of Easton in Easton.

DON'T EXPECT a perfect record on loans and grants made by the state economic development department. Officials there know that a few failures are inevitable, that the state could lose loan and grant money sometimes. That's the price of doing business with start-up firms and companies that need help to keep jobs in Maryland.State auditors have discovered that economic development officials in the Schaefer administration often made loans or grants without critical information and documents.

San Francisco's Bank of America has entered Baltimore with an aggressive push to generate small business loans.Top executives of the bank said yesterday that they have begun offering business operators, who receive guarantees from the Small Business Administration, loans at the prime rate for one year, along with 100 percent financing and discounts on fees."

The city's multimillion-dollar urban revitalization program may do a lot for city residents -- but it will not do their windows.Yet someone is calling residents and claiming that the program will pay for new windows and other home improvements, Mayor Kurt L. Schmoke warned yesterday."

WASHINGTON -- Gov. Jim Guy Tucker of Arkansas told a federal magistrate yesterday that he was not guilty of fraud, conspiracy and making false statements in obtaining millions of dollars of federally backed loans in the 1980s.Mr. Tucker, a Democrat, was indicted two weeks ago by a federal grand jury in connection with loans from a savings and loan institution that failed and is now at the center of the Whitewater investigation.Two other co-conspirators in that indictment, James B. McDougal and his former wife Susan, have said they will also plead not guilty at their arraignments this week.

Local lenders hope to reach thousands of potential low- and moderate-income customers next weekend during the second annual ACORN & Friends Bank Fair.Help will be available for potential homebuyers and others seeking home improvement or small business loans or looking to refinance a mortgage -- even for those who've been turned down before, say sponsors ACORN, the Association of Community Organization for Reform Now, and 15 area banks."If people are paying $250 or more a month in rent, they can buy a house rather than pay a landlord," said Kelley Collings, head organizer for Maryland ACORN.

First Fidelity Bancorp., the Lawrenceville, N.J., company that has agreed to buy Baltimore Bancorp, yesterday reported a 14 percent increase in second-quarter earnings.The company earned $111.6 million, or $1.27 a share, in the three months ended June 30, compared with earnings of $98 million, or $1.13 a share a year ago. Shares outstanding had risen to 86.1 million in the latest period, from 84.4 million a year earlier."The bank continues to benefit from stable core earnings while the company's capital position and asset quality continue to strengthen," said Anthony Terracciano, chairman and chief executive of First Fidelity.

Demand for business loans strongDemand for business loans has remained strong, the Federal Reserve reported yesterday in a seasonal survey that showed business borrowing has boomed despite repeated moves by the Fed to tighten credit.The Fed surveyed loan officers at 58 domestic banks and 18 U.S. branches of foreign banks in May. "Demand for business credit surged," the Fed reported. There was a notable pickup in credit demand over the past three months, since the last similar survey in February.

Ten thousand interest-free loans are expected to be made to small businesses under a new federal program launched in June, but so far many banks aren't participating. Loans are trickling out with only a half-dozen made in Maryland. The goal of America's Recovery Capital loan program, part of the government's economic stimulus package, is to assist viable, but temporarily struggling, small businesses by offering them interest-free loans of up to $35,000 with lenient repayment terms. Banks started accepting applications for the government-backed loans June 15. The program runs through Sept.

Four and a half years ago, Martin Haft took a deep breath, borrowed $150,000 from a bank in Carroll County with a Small Business Administration guarantee and opened Walk About Shoes, a specialty shoe store in Westminster. The store was the only one in the county with a wide range of shoes designed to meet medical or special size needs, and business grew briskly. Today, Mr. Haft finds himself beleaguered, in need of cash to buy inventory in the midst of a major economic decline. If he can't find the money he needs, there is a good chance that his shoe store will disappear, leaving an empty storefront and three people, including Mr. Haft, jobless.

WASHINGTON -Working to jump-start the economy's engine of job creation, President Obama announced yesterday that up to $15 billion will be spent to boost lending to credit-hungry small businesses. The new effort was also meant to allay criticism that the White House has focused too much on the needs of fallen financial titans on Wall Street and not enough on the economic damage to small businesses. The financial crisis has dried up most commercial lending, including the lines of credit that are the lifeblood of small business, which historically has created about 70 percent of the economy's new jobs.

The Federal Reserve is running out of conventional monetary policy and bond market options. Thus, the time for unconventional policies may be at hand. The Fed has cut the federal funds rate and its short-term lending rate to banks to near zero, but those moves have done little to unlock credit markets. Traditional mortgage money and business loans remain too scarce because regional banks - the arteries and capillaries of our credit system - remain short of loanable funds. Near-zero short-term lending rates for banks do little to help, because the regional banks do not lack for short-term access to funds; the Fed is providing all the near-term liquidity they want.

For many small businesses, bank loans, venture capital and money from angel investors are financing long shots at best. It is far more common for a small business to secure funds from family members or even friends. Availability is the big draw. The downside is that business loans from family and friends also can be a disaster if they are not handled properly. Unstructured or loosely structured financing and pay back terms can haunt both sides in the future. Research shows that 14 percent of business loans from family and friends go into default, compared with about 1 percent for bank loans.

Indicators Tuesday -- September pending home sales Wednesday -- October retail sales, Producer Price Index Thursday -- October Consumer Price Index, weekly jobless claims Friday -- October industrial production, capacity utilization Events Monday Veterans Day observance -- U.S. government bond markets and related financial commodities markets will be closed. Tuesday Small business opportunities in Dundalk -- Free information session by Lisa Fischer, owner of the Village Coffeehouse, presented by Community College of Baltimore County, Dundalk, 11:15 a.m., Village Coffeehouse, 3 Commerce St., Dundalk.

WASHINGTON - Banks in the United States relaxed credit standards for commercial and industrial loans in the past three months, as demand for consumer loans weakened, according to a Federal Reserve survey of bank senior loan officers released yesterday Forty-two percent of respondents said they eased standards for commercial and industrial loans from May through last month, up from 30 percent in an April poll, said the central bank's survey of officers at...

In a boost to Baltimore County's redevelopment efforts, three banks have joined the county to provide reduced-interest loans to small businesses in commercial revitalization districts, County Executive James T. Smith Jr. announced yesterday. M&T Bank, Provident Bank and Susquehanna Bank agreed to offer 1/4 -point discounts to businesses located in or moving to the county's 13 revitalization districts, which are concentrated in the older communities around the Beltway. The program is called "Revitalization Advantage."

Rakesh "RC" Shah has big plans for his fading motel business on U.S. 1 in southern Howard County. He hopes to demolish part of his 50-year-old Valencia Motel & Efficiencies to make way for a new Sleep Inn. Shah, an experienced hotel owner, has the architectural plans ready and artists' drawings that show the two buildings sharing 4 acres at the gateway to Howard County in Laurel. He is waiting for the county to approve his plans, and hopes to receive more affordable financing for the $4 million project through low-interest loans being offered by area banks to spur revitalization in the area.

Rakesh "RC" Shah has big plans for his fading motel business on U.S. 1 in southern Howard County. He hopes to demolish part of his 50-year-old Valencia Motel & Efficiencies to make way for a new Sleep Inn. Shah, an experienced hotel owner, has the architectural plans ready and artists' drawings that show the two buildings sharing 4 acres at the gateway to Howard County in Laurel. He is waiting for the county to approve his plans, and hopes to win more affordable financing for the $4 million project through low-interest loans being offered by area banks to spur revitalization in the area.