Increased interest in lending will make itself felt in one small way in Boise this summer.
A Northwest franchise of a national company that sells cellphone accessories will open its first full-fledged store in Boise Towne Square in August.
Ryan Spath, 29, and two partners own a dozen kiosks that sell Cellairis equipment, mostly in malls in Oregon and Washington. They were looking for an opportunity to open a regular store and found it in Boise.
Spath, who lives in Portland and has had the franchise for five years, sought help from several big banks but got nowhere. "We didn't get to deal with decision makers," Spath says.
So he ended up at Community Business Bank of Georgia in Cumming, Ga., near Cellairis headquarters. The bank gave him and his partners a $150,000 loan for four years at 5 percent interest.
"It's a make-or-break thing when you're a business and you can't secure financing," Spath says. "I want to think the credit market is improving."
Spath says his Boise store will hire eight to 12 employees to handle sales and repair. His franchise employs 45 people. Spath will manage the store from Portland.
Americans are finding it easier to borrow from banks, supporting consumer spending and business investment and helping fuel employment just as U.S. government budget cuts start to take hold.
Data from the Federal Reserve shows banks are more willing to lend, and their customers are seeking more credit as both groups gain confidence in the economic outlook. That is one reason economists at UBS Securities, who use measures of credit in their employment models, are forecasting payrolls will climb by an average of 200,000 a month in 2013, up from 181,000 last year.
"There's a continuing loosening of credit standards, and more importantly, demand for credit is up," says Sam Coffin, an economist for UBS in Stamford, Conn. "All that is good for growth and jobs."
Easier access to low-cost financing will sustain auto and home sales, spurring employment in manufacturing and construction.
It also means entrepreneurs will have the funds to put up outlets such as electronics stores and bagel shops and hire the staff to run them, providing a cushion for the labor market after across-the-board spending cuts to U.S. defense and domestic programs, known as sequestration, began on March 1. Easier credit may stimulate bigger gains in hiring even if President Barack Obama and Congress fail to reach a compromise on replacing $1.2 trillion of budget cuts over the next nine years.
A net 19.1 percent of banks reported increasing demand for commercial and industrial loans in the fourth quarter of last year, compared with a net 6.2 percent that reported a drop in the prior period, according to a recent Federal Reserve survey of senior loan officers.
"Aggressive competition" among lenders prompted banks to ease standards or terms, the central bank says. Demand strengthened for business loans, prime residential mortgages, commercial real estate lending and auto loans, according to the survey conducted from Dec. 27 to Jan. 15.
Household debt climbed by $31 billion, or 0.3 percent, to $11.3 trillion in the fourth quarter as student and auto loans rose along with credit-card balances, according to a Federal Reserve Bank of New York report.
It was the first pickup in borrowing in seven quarters and only the second since 2008.
Bill Roberts: 377-6408, Twitter: @IDS_BillRoberts