112-year-old US apparel maker in Pa. to close
But he needed time, and he needed money, and both were in short supply.
In the end, he couldn’t find the cash. And a few months ago, the bank called Fessler’s loan. The company was doomed.
Given its weak cash flow — Fessler’s sales were down 50 to 75 percent from their pre-recession peak of $25 million per year — did it ever stand a chance?
Meck, a wily businessman with nearly four decades of experience, insisted Fessler could have survived had he found a willing lender.
‘‘Very quickly it became clear that new regulations that were being placed on banks were crippling banks’ ability to do business, and it didn’t take along for that to rumble right down and hit us square in the face,’’ he said.
Meck’s lament about tightened credit is a common one among small- and medium-sized manufacturers, said Chad Moutray, chief economist for the National Association of Manufacturers.
‘‘Many of them have complained to me that the standards for borrowing have become a lot more strict since the recession,’’ said Moutray, formerly chief economist of the Small Business Administration. ‘‘It’s much tougher to get a loan today than it was in the past.’’
Banking industry veteran Bob Seiwert agreed that lending standards have made it more difficult to get a loan, but he said banks are eager to lend to viable firms, and are even sacrificing on terms because demand is weak.
‘‘Right now banks are awash in funds and they don’t know what to do with them. Banks are scrambling, competing for those few small business loans that are out there,’’ said Seiwert, a senior vice president at the American Banking Association. ‘‘Most small businesses today are on the sidelines.’’
Meck acknowledged his company’s problems went deeper than its inability to get a loan. And once word got out, customers began to flee.
Fessler continues to fill existing orders, but the signs of a company on the brink are unmistakable. Most of the sewing machines sit idle, and a section of the factory is filling up with equipment destined for liquidation.
Meck tries to focus on the good times.
‘‘I don’t want people to be sorry. I want people to be proud we lasted this long. I want people to be proud we tried,’’ he said. ‘‘We did good work. There is nothing to be upset about. In today’s economy and today’s world, it didn’t work.’’