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Debunking the Myth That Banks Aren’t Lending Money

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While the media would like you to believe that banks aren't lending money, Gary Shook provides the facts that debunk this oft-repeated story.

As I'm sure you know, the media sometimes gets the story wrong. In their rush to sell papers or attract viewers, they often go for the sensational headline at the expense of more meaningful facts.

Unfortunately, this is the case when it comes to stories about banking these days. Banks are easy scapegoats for many of the country's economic ills so the media jump on the bank-bashing bandwagon.

One story that continues to make headlines is that banks aren't lending. You've heard the stories - banks got bailed out with taxpayer dollars but now aren't using any of that money to make the loans that will spur economic recovery.

Contrary to those oft-repeated stories, the fact is that banks are indeed lending. According to the Federal Reserve, in 2009 banks made close to $300 billion in new loans. While that lending level is down substantially from the go-go economy of 2006 - 2008, commercial loan issuance in 2009 was about equal to the years when "normal" credit conditions prevailed, even when adjusted for inflation. And in constant-dollar terms, it's above 2004 - 2005 levels.

At Middleburg Bank, we are experiencing similar trends. While our lending is down from a few years ago, we have approved nearly $120 million in new loans just this year for area businesses, families and individuals. These loans are allowing businesses to expand, build new facilities and add to their inventory as well as helping people buy new cars, consolidate their bills and improve their homes. And our mortgage company has made $635 million in mortgage loans to help people buy and refinance their homes.

Now that loan rates are low and the economy seems to be stabilizing (or improving, depending on who you talk to), many families and businesses feel that now might be a good time to consider borrowing money to help them achieve their goals.

As they have for more than 85 years, those people often turn to Middleburg Bank for their loans. You see, as a locally-based community bank, we are dedicated to helping individuals, families and businesses get the loans they need to achieve their financial goals. Because we live here too, we have a vested interest in the success of our communities and we know that credit - properly used - can help make this area a better place to live and work.

When you come to Middleburg Bank for a loan, you will find that loan decisions are made locally, so you'll never have to ask someone who lives in North Carolina, California or Pennsylvania to approve your loan. This local decision-making also means that you will get a prompt and timely decision on your loan application. And since the bankers at Middleburg Bank know this area and the goals of the people who live here, they apply that knowledge to help our clients succeed.

If you are among the many people wondering whether now is the time to get a loan to help you achieve your goals, talk to the bankers at Middleburg Bank. We can discuss your goals, your financial situation and help you make the decision that's right for you. Just give us a call or stop by any of our offices.

Gary R. Shook
President & CEO

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