Lethbridge Herald, The (Newspaper) - January 14, 1975, Lethbridge, Alberta
16 LETHBRIDGE HERALD Tuesday, January 14, 1975 With its 5th anniversary in Lethbridge set for the end of this month, the Industrial Development Bank is enjoying a booming business. The value of loans from the Lethbridge of- fice of IDE in the Professional Building in 1974 increased 85 per cent compared with 1973 and the business boom means relocation of the of- fice and staff of 10 to larger quarters in the same building. Jim Evans, manager of the local IDB office for 18 months, said the location of a branch in Lethbridge five years ago has proved to be sound business for the operation and good ser- vice for the customers. Established by legislation as a subsidiary of the Bank of Canada in 1944, IDB makes term loans to new or existing businesses in Canada which are unable to obtain required financing from other lenders on reasonable terms and conditions. While it specializes in smaller businesses, there are no limits for loans. Of the loans processed from the Lethbridge office for businessmen across Alberta from Nanton to the United States border, 40 per cent are in the agricultural sector, mostly directly to farmers. The heavy agricultural business in Lethbridge is due to the heavy dependance on that industry in the area, said Mr. Evans. Tak- ing the total agricultural impact in the 71 IDB offices throughout Canada, the figure is closer to 10 per cent of all money lent. Another reason for the skyrocketing growth in lending by the bank in Southern Alberta is the relatively small centres served. Mr. Evans said businesses in larger centres have less difficulty in obtaining mortgage financing through regular channels since they are located nearer the borrower: Should the business fall-through, there is a greater prospect the bank or lending agent can find another buyer. Because IDB is a Crown corporation, it is ready to take more risks than other lending in- stitutions, he said. Interest rates charged by IDB are similar to those used by other lending sources, he said. For loans up to the rate is 12 per cent, to per cent and more than 13 per cent. Because IDB is a "last chance" lending agency, there is no interest break for the borrower but there is no penalty either. One of the policies of IDB to take more risk than other lending agencies provides more flexible operations for the Crown corporation. There is no borrowing ceiling and all loans are worked out between bank personnel and the borrower to suit the requirements of the BANKER JIM EVANS businessman. Criteria for a loan is not set. The Farm Credit Corporation and the Alberta Agricultural Development Corpora- tion are the primary agricultural lenders in Canada and the province. But both have restrictions on their money so they can't meet the needs of all borrowers. "We lend around those said Mr. Evans. IDB will also lend money to persons holding employment in cities or towns who want to buy land to have a chance to get into the agricultural industry. While these loans are carefully screened to stop hobby farmers from getting money, they play an important role for IDB. The central office for IDB is in Lethbridge, but it is policy for the bank to go to the people, said Mr. Evans. On a regular basis, depending on the need, IDB staff from Lethbridge visit' 16 centres throughout Southern Alberta. Prior to the visits, advertisements are run announcing the IDB ininerary. The centres served in this way include Medicine Hat, the Crowsnest Pass, Pincher Creek, Fort Macleod, Claresholm, Cardston, Raymond, Magrath, Picture Butte, Barons, Coaldale, Taber, Foremost, Bow Island and Coutts Warner Milk River. While serving as an alternative to chartered bank borrowing, IDB works closely with those institutions, said Mr. Evans. About one third of the IDB business in Lethbridge is referred to Mr. Evans from chartered banks. While IDB has secured loans up to million for Canadian business, the largest loan from the Lethbridge office is just more than Whatever the amount, IDB is easy to get along with. Outside of a requirement that monthly interest payments be maintained, there is no maximum repayment period. Borrower and lender agree to all par- ticulars. IDB wants to get all its borrowed money back with interest but it also wants to help the business community in Canada, said Mr. Evans.