The credit crunch

When I bought a home in 2005, banks were more than willing to finance the purchase. Some were offering loan amounts that exceeded my comfort level by tens of thousands of dollars.


Today, banks are much more cautious, and loans are hard to come by, say glass company execs. “From our standpoint, one of the most major challenges right now is the availability of money,” says Newton Little, executive vice president, Ace Glass, Little Rock, Ark. “Money is available, but [banks] want you to have more skin in the game than we think is reasonable,” he says.

It’s the banks, not the number of jobs coming in, that’s more of a problem, says Charlotte Broussard, owner and CEO, Universal Window and Door LLC, Marlborough, Mass. “This year, we are quoting more projects than we have in the last three years, with continual value engineering. After the engineering, unfortunately many banks are not funding the projects,” she says.

Credit will be instrumental for us to move forward, agrees Ed Sieber, president, Glass Doctor of Charlotte, N.C. “We’re going to need the capital to buy vans, equipment, etc., for when we do grow. Dina Dwyer, CEO, The Dwyer Group, was on Capitol Hill speaking before Congress to help free up credit for small businesses. If they can make some headway and free up some of the credit, it will enable us to be able to hire people back.”

Indeed, underwriting standards remain tight, according to a Sept. 9 “State of the Financing Markets” Webcast from Lincoln International LLC, with offices in New York, Chicago and Los Angeles. “Conventional wisdom would say that the broader economy is out of the recession and company performance is improving; however, credit is available for only the highest-quality companies,” officials stated in the presentation. “The recent stagnation in loan volume and mergers and acquisition activity is due to a combination of lack of visibility into many borrowers’ future performance, and underwriting standards of lenders still providing capital remaining very tight,” they said.

Glass Magazine will delve deeper into the issue in the December 2009 edition and we'd like your input. How is the credit crunch affecting your business, and what effect has it had on your customer base?

—By Jenni Chase, Editor, Glass Magazine