re: #668 compound idaho

So why are banks lending long term money at less than 5%? Hard to figure.

Low demand:

In much of the country, small businesses are sitting on their hands, nervous about the future, and uninterested in taking on more debt. So they are not demanding loans, and community banks don’t need capital.

There are 7,000 community banks across the nation, according to the Independent Community Bankers of America (ICBA). But only 926 — slightly more than 13% — of those banks even applied to participate in the program.

“As part of the application, you had to have a small business lending plan to demonstrate that you could deploy this lending,” said Paul Merski, executive vice president and chief economist of the ICBA. “You have to have small business loan demand.”

In regions of the country hard hit by high unemployment and the collapse in the real estate markets, loan demand is nil, noted Merski.http://money.cnn.com/2011/07/19/smallbusiness/small_business_lending_community_banks/index.htm