Sign of the times

Joanne:

Thanks for the info. Our information on the Floyd Lemons closing came from Dirk Davis, who owns the building and the Nationwide Insurance Agency next door, and from the headquarters of the Lemons chain in Galax. I called them Friday to ask if other stories in the chain would be closing and they said "no."

I've also had people ask if I knew who owned the building so they could inquire about renting it. I have a lease and am happy where I am in the Village Green but I have directed the inquiries to Dirk.

I'm glad to see the interest but it is also offset by the fact that I know of two other business owners who have said this year is "make or break" for them and rising gas prices and a shrinking economy are reasons to worry when survival depends on visitors more than locals. One business in Floyd is the market and owners of another are quietly shopping thier location for sale.

The problem is nationwide and Floyd is not immune. As The Wall Street Journal reported this week:

The turbulent economy is exposing yet another type of credit where bankers let their guard down: small-business loans.

Missed payments and losses on small-business loans are surging at banks throughout the country that were so eager to pad their profits that they essentially threw typical underwriting methods out the window. Some lenders doled out small-business loans as if they were credit cards, relying solely on the personal credit scores of borrowers.

That meant many loans were made without assessing a company's strategy or finances, even by banks that avoided subprime mortgages. Now the economic slowdown is leaving lenders with little or nothing to collect on many small-business loans in case of default.

The mistakes already are haunting lenders from Bank of America Corp. to Sun Bancorp, a Vineland, N.J., bank with 70 branches. The problems are expected to spread as business failures mount. Tighter lending standards as banks try to reduce their risk are making life tougher for small-business owners.

(Updated to correct Dirk Davis' last name and adding the information that he also owns the Nationwide Insurance Agency next door -- which I should know since he is my insurance agent. I should never post anything before the third cup of coffee. Thanks to Joanne Bell for catching that.)

Thanks Joanne. I should never answer posts before the third cup of coffee in the morning. Dirk is my insurance agent. It has been updated.