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Show 8monday, Money squeeze Private Label Blended Tobacco Choose your own blends Mail Order Service Walk-i- n Humidor loans for commercial property, or loans for a capital purpose, like a second mortgage obligation. Christensen said loans written at First Federal are basically residential. But the tight money is not limited to the real estate market. Business expansion plans are subject to, as Holt put it, closer scrutiny, and that means a goodly portion are probably being turned down. And if a businessper-so- n Unique imported pipes from Europe and the world 215 Trolley Square 534-10- 66 is lucky enough to walk No matter what size or buildings insure fast completion at a lower cost. And if you are worried about the high costs and style building your business requires we are very probably the answer. For years hundreds of Utah businessmen have depended on Beil Construction for help in site selection, design, financinthe way to completion. g-all steel Our Kirby pre-engineer- increas-complexi- ty of. building, worry no longer. Remember Bells turn-ke- y service will do it all for you. If you're looking for an attractive, functional, sturdy building backed by complete turn-ke- y service, remember us. ed Salt Lake City, Utah 972-40- rtf-- , y ' 84104 BUILDER Kirby 98 l; r Nearly 2 Vo higher Continental Bank, which pegs its prime rate to Chase Manhattan Bank, now lends money to its very best corporate customers for 8 12 percent. The prime rate stood at 6 34 percent in the last week of May last year, according to Lohr Livingston, vice president at Continental. Incidentally, that prime Motors, club-Gen- eral BELL CONSTRUCTION FRANCHISED out of a bank with some newly acquired funds, hell be paying a good deal more for them than he would have a year ago. That, in itself, prices some potential borrowers out of the market. Marginal companies simply cant afford the going rates in todays market. rate goes to a very exclusive Looking for the best building? 1632 South Redwood Road Continued from page J.C. Penney, and others of like size and financial resources. One can imagine what the prosperous local businessperson would have to pay. And if youre feeling optimistic, youre not in plentiful company. Holt said, Ive heard of eastern bankers, basically in New York, who think this time next year the prime rate will be up to 11 percent. Now thats scary. If the General Motors of the world have to fork over 11 percent to borrow, imagine what regional and local outfits would have to pay. Blame it on the Fed Causes of tight money are both simple and complex, national and local. Norton Parker, president of Capital City Bank said The basic reason for the credit contraction is the Federal Reserve, which has been trying to raise the interest rates and lower money supply growth. The object, of course, is to keep inflation under control. By raising interest rates, primarily through the Federal Funds market, the Fed is signaling bankers that it desires less loan formation. Holt said Yates Industrial Park that was a large factor, and fts working. Furthermore, street talk has it that a local bank, short on high level management these days, is either cutting back or calling long standing bank lines for fear of being caught with a mess of bad loans made by junior executive officers. Demand is strong Nationally, was well as in Utah, the loan demand has been extremely strong. Locally, Holt attributes it to the strong economy and a surging real estate market. Christensen says the strong loan demand in this area, and nationally, is broad based. In Salt Lake, deposit formation has been traditionally weak compared to the demand for loans. Christensen said, Salt Lake is a capital short area. We have always had to go outside for our funds. Now, those people who supplied our funds are feeling high demand themselves. Easy funds hard to get With the Fed pushing interest rates up, and the Federal Home Loan Banks following suit, the cost of funds, even the easy funds like Federal Reserve and FHLB advances, is getting higher. According to John Clebb, president of the Federal Home Loan Bank of Seattle, ten year advance now cost the savings & loans 8 78 percent compared to 8 14 percent prevalent a year ago. Clebb said there was no credit squeeze, but his comment was the lone voice in the wilderness. Some savings institutions are becoming concerned with disintermediation. That is to say, with interest rates moving up (four month Treasury Bills Continued on page 9 VENTURE CAPITAL A FEW SELECT SITES AVAILABLE FOR LEASE NOW INCLUDING: Firm seeking fresh investment opportunities. Higher than average profit potential required. Real Estate preferred, but all situations 1. OFFICE - 9000 SQ. FT. - CAN SUBDIVIDE INTO SMALLER SPACES. 2. WAREHOUSEOFFICE - 10,000 TOTAL - WITH 1500 FT. OF OFFICE. FT. All examined. replies confidential. 3. OFFICEDRAFTING - FOR ARCHITECTS, ENGINEERS, ETC. LOADED WITH PRESTIGE HEART OF SLs leAcjv COMMERCIAL AREA EXCELLENT FREEWAY ACCESS stfcccifi Yates Industrial Park Phone 801 --29001 77 P.O. Box 935 Salt Lake City, Utah 841 10 405 LAWNDALE DRIVE (2500 South) Salt Lake City, Utah 84115 V |