It is definitely possible for businesses to borrow money these days, despite an economy that is still shaky, a local banker said Tuesday morning.
Mike Livingston, president and CEO of the Bank of Glen Burnie, told members of the West Anne Arundel County Chamber of Commerce that community banks such as his are willing to lend money to qualified borrowers, and that the economy is improving, albeit slowly.
Livingston made his comments during the chamber’s monthly breakfast at Kaufmann’s Tavern in Gambrills. Bank of Glen Burnie has eight branches in Anne Arundel County, including Odenton.
“[The economy] is very weak, very fragile,” Livingston said. “There are a lot of things tugging. But I don’t think it’s getting worse. It’s slightly improving.”
Livingston pointed to the results of recent surveys suggesting that banks are more optimistic about the economy than at this point last year. He said job growth has been too slow and that rising gas prices are a drag on the economy. But he said other indicators tied to retail spending and manufacturing and industrial production are trending positively.
The banking executive also said Anne Arundel County has not been as hard hit by the economic downturn as the state and nation as a whole. The unemployment rate, at 6.4 percent, is nearly three points lower than the national average and below the state average of about 7 percent.
“This is a great place to be,” Livingston said. “There are other pockets of this state that aren’t as lucky.”
Livingston said his bank has remained profitable during the economic downturn, in part because it avoided subprime lending and maintained a focus on the borrower’s capacity to pay back loans. He said Bank of Glen Burnie and other community banks will still lend money to qualified people as long as they can show they have an ability to pay back loans.
“We look at cash flow,” he said. “We look at how they’ve paid their bills in the past, their character. We like to see our borrowers have something in the deal with us. We never did the 100 percent financing. I like to say that if we do a deal with you, I don’t want you to walk away and not get hurt. I want to see you get hurt as much as we do.”
He said there remains a perception that banks aren’t lending money, because other sources of funding, including venture capitalists and hedge funds, have pulled back.
“The banks can’t fill that void,” Livingston said. “Banks can’t be an investor. They have to manage risk. Banks can’t provide all the funds for growth that this nation needs.”