Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, February 26, 1995 TAG: 9502240066
SECTION: BUSINESS PAGE: F-4 EDITION: METRO
SOURCE: MATT CROWDER STAFF WRITER
DATELINE: LENGTH: Short
"We've seen a slowing of new loan demand for small- to medium-sized businesses in the valley; the lower end of the sales size businesses," said Robert Lawson, president of Crestar Bank in Roanoke. "If there is a demand for commercial loans at the moment, it tends to be in larger companies in the region."
Lawson attributed the slowdown mostly to economic cycles and the Federal Reserve Board.
"Business is beginning to slow down slightly. The reason the Fed has increased interest rates is to slow down the growth in business. I think it's beginning to take hold and have that effect."
He said that the prime rate has risen from 8.5 percent at the beginning of the year to 9 percent now and that increases in the prime rate get passed right along.
"In one way or another, when the Fed raises interest rates, it tends to work its way through the loan rates, to businesses as well as consumers."
Lawson said that Crestar will have to step it up in order to restore loan demand to its 1994 level.
"For loan demand we have to work a little harder to seek out borrowers. Historically speaking, rates are not terribly high. Any rate increase is perceived to be bad, but when you look at rates from a historical perspective, they're not terribly onerous.
"All you can do as a practical matter is work harder to get in front of people who have a borrowing need."
by CNB