LAKE COUNTY, Fla. - New rules are keeping banks from lending money, and experts said that keeps the economy from bouncing back faster.
The CEO of several central Florida banks was rejected almost 10 times for a loan to start a business.
"It's all that land out there," said Ken LaRoe, as he took Eyewitness News anchor Jorge Estevez on a tour of the land he wants to build on and start a restaurant.
LaRoe said he wants to kick-start the local economy in Lake County with a new restaurant, but he needs cash. He said higher lending standards are restricting banks from handing it over.
"After weeks and weeks and weeks and me calling and calling and calling, they would call and say, 'We are so sorry. We are just not going to be able to do it," said LaRoe.
LaRoe has been looking for a loan for two years to build a Mellow Mushroom restaurant in Lake County. He said he was rejected nine times by nine different banks. There is currently already one location in Winter Park.
LaRoe has been a banker for 30 years. He is CEO of First Green Bank and knows exactly how to present a good package to entice any bank.
"My president looked at this and said if it was this set of borrowers with this set of acts, we would do it all day long," said LaRoe.
"Right now, from a lending perspective, it is
very, very tight," said Jack Greely an attorney who works with banks.
Greely pointed out that new nationwide standards are all about reducing risk, no matter how much collateral a person may bring to the loan. He said start-up businesses like restaurants are seen as having a higher risk.
"It is completely different than what is was four to five years ago," said Greely.
The standards prevent LaRoe from getting his loan. That delays his employing people both for the actual restaurant and also for the construction of the business.
It also holds back the $2 million that building the restaurant would pump into central Floridas's economy.
"This economic breakdown is truly unlike anything I would have ever thought I would have experienced," said LaRoe.
Estevez learned that LaRoe's own bank cannot legally lend him the money.
In the past two weeks LaRoe has received word from a bank that is willing to being the loan process. He said if all goes well it could still take another year before construction even begins.