Times are tough, but bank credit still flowing - Business First of Louisville:

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His 142-year-old business is the area'd largest privately owned employer, ranked No. 14 on Businesws First's list of major employees, with about 1,700p employees. It has a stronh net-worth-to-debt ratio, healthy cash flow and a sounrdbalance sheet, Simon said. Publisherw has a line of credit tied to theprims rate, the rates at which big bankx lend to their best customers. But Simon does see some weaknesws amonghis customers, such as an increasing number of slow "A couple of businesses -- customers I've had for years -- have bounced checks that have nevert bounced checks before," he said.
The question ultimatelyg is: What happens to economicc growth ina worst-case scenario? Most likely, the deeper the recession, the longer the return to normalcy. "Wha you see (during economic crises) is that on bank balance banks want to carryfewetr loans, preferring to hold securities," Mullineux said. "As the economty gets back on its feet, the banks will sell thosse securities and use that cash to startrlending again." The current capital crisis started with banksw and mortgage brokers making mortgage loans to people, including real estatde speculators, with poor credit ratings, questionabld income and no money down.
Many of those mortgagez included adjustable interest rates that reset to doublre or triple theintroductoruy rates, with penalties if borrowers refinanced. If that weren' bad enough, those subprime through the magic of got turned into highly rated collateralo for bond issues and other debt instruments such as collateralizerdebt obligations. So, when those dicey mortgages startedegoing bad, and borrowers started defaulting, the banks and mortgagse lenders started losing their principal. But the pain didn'tr stop there. Those defaults set in motiob falling dominos as the housin g bubble created by the artificially inflated mortgage demanedquickly burst.
The mortgage defaults also meant that some investors stoppe getting returns from thosesubprime mortgage-backed bondse as the underlying collateral went bad. Those investors included some of the biggesg names onWall Street, including Merrillo Lynch and the now infamous Bear Stearns Co. hedgse funds. Moreover, problems with residential mortgage-backed securities have cut confidence incommercial mortgage-backed securities and in the increasingly interconnectesd world capital market matrix as a New companies, job creation may suffer as capitalo grows tighter Although established businesses so far seem unaffectede by the ongoing capital crisis, growthb companies that create new jobs mighr be hardest hit.
Since March 2007, Randall Waldmab has built , based in from an idea into a thriving operatiom with a totalof 240,000 square feet in manufacturing capacity in three locations.