Bank bets on printer vs. digital world

In this digital world, old-industry companies can be busier than ever. Take Nick Maiale's Pennsauken, N.J. printing company, Inserts East Inc., which recently borrowed nearly $5 million from TD Bank to add new presses and hire 30 people - boosting total employment above 200.

Maiale says he's so busy printing circulars and newspaper inserts for ShopRite, A.C. Moore and other retailers that he's getting ready to add more printing machines. He's growing despite - and partly because of - cutbacks and shutdowns at rival printers like AFL Web Printing, whose private equity owner shut its Voorhees plant last winter, and bankrupt Vertis Communications.

What does it take for an old-economy company to expand in the face of plant closures? What are bankers thinking when they advance money for heavy iron instead of software? Read more in my Page One story in today's Philadelphia Inquirer here. Not a subcriber? Use promo codeD18T to access the story this week. Some highlights:

More U.S. companies have been raising money to grow. industrial and commercial lending rose at all 10 of the largest U.S. banks, according to bank tracker SNL Financial. (By contrast, residential and other-commercial lending was flat or declining.) Small-bank business lending is also up modestly, especially in the Northeast, raising hopes more companies will hire.

"We're seeing pockets of improvement," says Joseph Tredinnick, who heads business lending for TD Bank from the Princeton area to Camden, and who oversaw predecessor Commerce Bank's initial loan to Maiale and his father seven years ago. 

"I look at people's financial statements every day. Owners are making money. They are reaccumulating wealth," Tredinnick added. But many aren't ready to expand: They are still paying down old loans. Or they are not yet convinced their customers are ready to spend more, and are piling up capital instead of risking it.

Before pumping cash into resurgent industrial firms, lenders and investors want to see more than just profits. "The numbers have to make sense - and the story has to make sense, as well," Tredinnick said. In Maiale's case, Nick and his father, Gino, now retired, "stuck with what they knew," said Tredinnick. "They're not trying to be something they're not." They have avoided printing dailies or glossy magazines, for example.

Despite bankers' common complaint that good borrowing prospects are rare, lenders reject a lot more proposals than they endorse. "I've found you get more with 'no' than 'yes,' " Tredinnick said. "That's because my 'no' is usually 'no, but.' And a 'no, but' gives owners direction."

 Lending is like other human relationships, he concluded: "Sometimes we've said no and the borrower's not happy. But we keep going. We're in this together."