If there is one thing that unites the printing business, it is the industry’s dislike of banks. Graphic Monthly’s recent survey results of printing company owners and banks (p. 43) came back loud and clear. Printers don’t like dealing with their banks, which, in turn, don’t seem to like the printing industry.

Fifty per cent of the printers we polled said they don’t think the banks value their business. Most said the banks don’t understand the printing industry. In my discussions with several bankers, they rated the risks of lending to the printing industry just a little lower than lending to restaurant and auto repair businesses. (Naturally these bankers did not want me to divulge their names or banks.)

So it’s clear, our industry is not exactly on the top of the banks’ prospect lists. I have to ask, why not? If they’d only look a little more carefully, the banks would discover that this industry meets a number of their criteria.
Banks like to lend to businesses that have hard assets. Between real estate, equipment and inventories, our industry has plenty of them. Bankers like collateral that can be liquidated relatively easily. Most printing equipment is mass-produced, not customized, so it can be re-sold in Canada or internationally in a snap and its value doesn’t readily depreciate. The relative value of equipment can be easily obtained by monitoring the used equipment market, which is enormous in this industry. (Take a look at our Graphic Arts Marketplace in this issue, p. 50.)
Banks prefer manufacturing businesses to idea-oriented ones because it’s easier to understand their ratios and balance sheets, and their main assets don’t leave the building every night. I don’t think banks are aware that the printing industry is a huge manufacturing sector in this country. There are more printing shops in Canada than in any other form of manufacturing and it is the fourth-largest industry in the country, racking up $11 billion in sales last year.

Banks like customers who use their services—such as lines of credit, chequing accounts, credit cards and online banking—or anything involving a service charge. Printers use all of the above and then some.

More importantly, banks don’t like risk. The Office of the Superintendent of Bankruptcy in Canada reported only 58 printing-company bankruptcies in 2002, 56 in 2001 and 46 in 2000—most of these had less than 10 employees. That’s less than 1% of the 7,000 (depending on who’s counting) printing establishments in Canada.

However, the biggest problem between the banks and the printing industry is a lack of communication. (Not like this is the first time you’ve heard that or anything.) For some reason, the stats and ratios that a lot of the banks have on the industry are just plain wrong. One bank manager said they use comparative stats from the printing and publishing industries. Having been in both businesses, a comparison stat taken from a printing and a publishing company is next to useless. Another manager said his bank got its comparative numbers from a stats firm in the U.S. and really wasn’t sure what those numbers were based on. The real problem is, none of the managers I talked to use their own internal numbers. My guess is, of the big five chartered banks, each has at least 1,000 printers as customers. The customer base would make for fairly reliable, internally generated statistics, if only the banks would bother to collect them.

Maybe the best way to remedy the banks’ “dislike” of the printing industry is to educate or sell them on it. Like it lobbies the government, the CPIA, or some other industry group, could present the banks with the industry’s real facts and figures. The more a bank knows, the lower the risk appears and the better it is for us as clients. Who knows? With such information at hand, the banks could even come to like us, really like us.