Banks see uptick in business loans
Small businesses mired in a slow economy have begun to take advantage of low interest rates and flickering prospects of an economic recovery, and several Grand Junction bankers are beginning to see clients taking out loans again.
Small businesses are applying for loans at a pace that bankers haven’t seen since the economy began slowing in 2008.
“We’re seeing a wide range of new commercial loan activity, from $50,000 to $20 million,” said Vance Wagner, ANB Bank regional president.
“It’s bigger numbers than we’ve seen in the last four years here in western Colorado,” Wagner said. “We’re kind of bullish about what we see.”
ANB is far from alone.
“We certainly have seen that,” said Steve Irion, community bank president and business banking manager at Wells Fargo Bank in downtown Grand Junction, adding a cautionary note that the bump in commercial loan demand is “nothing close to what it was in the mid-2000s.”
Still, Irion said, “I think there is some more optimism and that has something to do with the industry” that potential borrowers are in. “There have been opportunities and people are more willing to step up.”
Herman Lucero of HRL Compliance Solutions was ahead of the curve when he began looking more than a year ago at his prospects.
In a meeting at US Bank, Lucero said he became convinced that he would be better off paying a mortgage at less than 4 percent than he was paying rent.
“The economy being what it was, I wasn’t sure it was a good time to do that,” Lucero said. “Now I couldn’t be happier, I’m saving a ton of money” by buying instead of renting.
Timing, too, has paid off, Lucero said.
While he’s running the Grand Junction office with its 33 employees at 2385 F 1/2 Road, he just completed a hire to begin work in the DJ Basin in eastern Colorado and he already has a five-person office in Pennsylvania, where the Marcellus shale is being worked for natural gas.
And, he said, “we’re seeing a little uptick in the energy sector here.”
Lucero’s story is a familiar one, said Randall Cupp, US Bank vice president and commercial banking team leader.
“We have continued to see strong commercial loan demand from businesses in the Grand Valley as they take advantage of lower interest rates, along with economic stabilization across most industries,” Cupp said.
Low interest rates “make a huge difference and provides an opportunity for folks to get into property who might not otherwise be able to,” Irion said.
That environment also benefits many of the “niche businesses” that have taken root in the Grand Valley, Irion said.
“There are a lot of little companies that folks don’t know about,” Irion said, and learning about them is “the most fun thing we get to do.”
After a long run of little demand, Wagner agreed, “We’re having fun again.”