13 July 2009
Printers having a harder time getting loans in recession
MISSISSAUGA, ON—The economic meltdown has made accessing financing a challenging task for printers, according to results from Graphic Monthly Canada’s recent banking survey of 155 printers. The majority of respondents—63%—said obtaining financing has become significantly (24.8%), moderately (16.1%), or somewhat (22.1%) harder in the last six months. Credit requirements have also tightened considerably, according to 35.5% of respondents. As one printer who had a recent purchase scuttled by lack of financing put it, “We have very safe banks in Canada 'cause they don’t lend money.”

Printers and banks have never been peas and carrots, but most printers rated the quality of service at their bank as “excellent” or “good,” a marked improvement from our last banking survey in 2003, when most respondents selected “fair” or “poor.” Those dealing with smaller operations, such as credit unions and caisses populaires, seemed most impressed.

“Our business is in a small town and our credit union is run by friends and people we know,” said one instant printer. “I think that can make a big difference when dealing with a bank.” A small commercial printer with Scotiabank said, “We are in a small town, and they recognize the business difficulties better,” adding that the bank has become more co-operative, a greater understanding of his business challenges and given more latitude in the face of the recession.

But it’s not all peaches and cream. The trouble for many printers has been on the credit front, especially over the past six months. Asked to identify changes in banks’ behaviour in the first half of 2009, printers said financial institutions have become “more demanding” (26.3%) and “less understanding” (15.8%). Owners also “feel under closer scrutiny” (21.1%) from banks and that their business is valued less (16.4%). A Royal Bank customer complained about, “Reps that can't/won't rectify bank mistakes that work in their favour…increases in interest rates that run counter to the performance of the company and random and ridiculous increases in administration fees.”

Of course, printers aren’t the only ones having trouble accessing capital these days. “We have been okay thus far,” said a TD Canada Trust customer. “But the bank manager has candidly commented that they are only lending money to people that have it from now on. I don't think they are picking on printers, just being overly conservative in general.”

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