Greg Ip

Articles by The Economist’s U.S. Economics Editor

Archive for June 2002

Credit Window: Alternative Lenders Buoy the Economy But Also Pose Risk

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Manufacturers, Other Nonbanks Fund Ever More Business, With Little Supervision — GE Capital Rescues a Printer

By Greg Ip

2518 words

10 June 2002

The Wall Street Journal

A1

English

(Copyright (c) 2002, Dow Jones & Company, Inc.)

Last year started badly for Peake Printers Inc. Several firms whose annual reports it had expected to produce perished. Things got worse when Bank of America said the Cheverly, Md., commercial printer would have to repay a $3.2 million loan by year end.

Two other banks declined to lend. “They were trying to back off on printing businesses,” says Joseph Moran, Peake’s chief financial officer.

With the 125-employee firm’s survival at stake, Mr. Moran finally found an eager lender: General Electric Capital. Though Peake had to put up printing equipment, a building, accounts receivable and $1 million of the owners’ cash as collateral, it got the loan it needed.

The financial-services arm of General Electric Co. illustrates how nontraditional lenders are taking over from banks as suppliers of credit to big slices of the U.S. economy. Read the rest of this entry »

Written by gregip

June 10, 2002 at 10:57 pm

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