Money to lend, but few to lend to, execs told

There is extreme competition and large amounts of unused capital in the lending market, a panel of local industry specialists said Wednesday morning.

About 70 lawyers, consultants, bankers and businessmen attended a discussion at the Milleridge Inn in Jericho on the state of lending hosted by the Long Island chapter of the Turnaround Management Association.

The emergence of smaller banks and private lending firms and the scarcity of viable companies to lend to has created a highly competitive market for those making business loans, the speakers said.

This has led to large amounts of money lying on the sidelines not being used and generating zero returns.

"Having money on the sidelines is a good thing to a certain extent because for the companies that seek capital, it's there," said Ed Blaskey, TD Bank's market president for Long Island. But "for banks, it's a challenge in terms of getting returns."

The abundance of liquidity does not mean all lenders are readily making loans; finding low-risk investments and companies to borrow from them remains a problem.

"There are significant constraints for people trying to put money out," said John Fox, the president and chief executive of Forest Capital Llc. "But I think the most important thing at the moment is that potential borrowers have a crisis of confidence. They can't meet credit criteria, and the quality of their debts leaves a lot to be desired."