Manufacturers outline the big hurdles faced obtaining credit
Oct 09, 2009 | 11:51 AM
| Corinna Petry
Small- and medium-sized manufacturers, especially precision metal parts makers and equipment suppliers to the auto industry, face high hurdles in obtaining credit, spokesmen testified Friday before a Senate Banking subcommittee.
Requirements to access credit have become so tight for some small companies that banks are telling them to put up their own homes, their life insurance policies and their children's assets as collateral for a loan, Robert C. Kiener, director of marketing and communications at the Precision Machined Products Association (PMPA), Brecksville, Ohio, told the panel.
PMPA members, who make parts from steel, aluminum, brass and aerospace alloys for major industrial customers, "are often trapped between the troubles of their much larger customers and financial institutions," he said.
Smaller members began reporting challenges accessing traditional lines of credit last October despite decades-long relationships with their banks.
"In our industry, small manufacturers are required to purchase raw materials on their own, in some cases not seeing full payment for six months," Kiener said, while meeting loan requirements takes three to four months compared with 30 days in the past.....
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