Wednesday, May 20, 2009

Economist, lenders offer advice

Forum in Ketchum provides optimism during tough situation

Express Staff Writer

The city of Ketchum brought in an economist and a panel of lenders to help provide an overview of the current financial situation and information for borrowers in the wake of the First Bank of Idaho failure.

Around 75 people were in attendance at the Presbyterian Church of the Big Wood on Friday afternoon. They included business owners, local bankers, city officials and state Rep. Wendy Jaquet, D-Ketchum.

Ketchum Mayor Randy Hall arranged the forum as a way to help local business that might be hurt by last month's closure of First Bank of Idaho, which was taken over by the Federal Deposit Insurance Corp. With the closure, the FDIC froze lines of credit that many businesses had with the bank, seen as essential for financial stability during the slow "slack" season.

"We've taken a couple of body blows, first with the Castle Rock Fire then with First Bank," Hall said to the crowd. "There are now concerns about getting enough short-term operating capital to get through slack and the long-term national economy."

Jeff Thredgold, president of the Utah-based consulting firm Thredgold Economic Associates, led off the luncheon with an overview of the national economy, expressing optimism despite the downturn in tourism.

"We traditionally thought skiing and gaming were recession-proof industries," Thredgold said.

He explained that while visitation numbers have declined for ski resorts, there is reason to think the situation will improve.

"Soon people will be realizing it's a great time to buy a house, purchase stocks or hire talented staff," Thredgold said. "I think the numbers for the ski sector will be better next year."

Lenders from the U.S. Small Business Administration, Idaho Small Business Development Center and the nonprofit Business Lending Solutions had more immediate good news about lending.

Jaquet and Ketchum Community and Economic Development Director Lisa Horowitz agreed that a new program launched by the Small Business Administration on Monday could be of great benefit to businesses looking to make it through the slow spring season before summer revenue begins to flow in.

The America's Recovery Capital program offers deferred-payment, interest-free loans of up to $35,000, all of which are 100 percent guaranteed by the SBA.

The loans will be available beginning June 15 to "established, viable, for-profit small businesses that need short-term help to make their principal and interest payments on existing qualifying debt," according to the SBA. These loans will be made through commercial lenders, not the SBA directly. Information on the loans can be found at

"I think this will be very attractive for businesses during the shoulder season," Jaquet said in an interview.

Jaquet was worried that some businesses would not be able to qualify for loans after the decrease in cash flow resulting from the Castle Rock Fire in 2007 and a slow ski season. But Russ Butler, a lender relations specialist with the SBA, said the agency would look at loans that do not meet individual banks' criteria.

Local banks in recent weeks have said they have experienced increases in business loans and lines of credit.

"The main message for the retail and construction sectors is that there are options out there," Mayor Hall said in an interview. "The private sector is stepping up, so it's probably time for the city government to step back."

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