Letters

Readers react to articles from the April 2000 issue of Inc., including "How to Finance (Almost) Anything," by Jill Andresky Fraser, "The Little Engineering Company that Couldn't," by Edward O. Welles, and "Those Were the Days," by Steven Berglas.

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Our April issue seemed to touch a personal nerve. It prompted readers to write in with stories from their pasts on everything from being young and rejected for a bank loan, in response to our "How to Finance (Almost) Anything" cover feature, to Yeoman Engineering, the subject of our On the Road story.

Juvenile nondelinquent

Every year Inc. finance editor Jill Andresky Fraser takes a look at current financing options for small businesses. This reader identified with the timelessness of the topic, and responded to Fraser's April offering, " How to Finance (Almost) Anything," with a story of his own troubles getting a loan almost 20 years ago.

I had to laugh when I read your feature "How to Finance (Almost) Anything," regarding all the problems small businesses have in obtaining money. It reminded me of the time in 1982 when, after running my business for almost five years with meager, yet consistent, profits, I was turned down for a loan of $6,000 that I would have used to purchase some equipment. I was 23 years old.

Moments before the rejection, I'd overheard a conversation between my loan officer and another bank client, who owed the bank $500,000 that he couldn't pay back. The loan officer agreed to extend the delinquent's due date and offered him an additional $250,000 to get through the rough times.

Perplexed at the fact that a man with a debt he couldn't repay was being given another $250,000, while I, with nothing but success behind me, couldn't get a plugged nickel, I asked the obvious question: "Why?"

My loan officer told me that even though I'd never failed, he'd still loan money to a customer who'd gone bankrupt before he'd loan any to me. He explained that someone who had gone through hard times would be able to see hard times ahead, whereas I wouldn't know I was in trouble until I was in the thick of it.

This same bank told me that I didn't have the financial ability to pay off the amount I was requesting in the required time (36 months). I went to 11 other banks and finally found one that was happy to loan the money to a small, aggressive company. In less than eight months I'd paid off the entire balance.

Twenty-two years later, we're the largest company in our state for what we do, we've gone national, and just recently we started sending proposals to companies requesting information on licensing our patented technology in other nations.

And the first loan officer? He was fired 18 months after my visit.

Don't give up.

Jon Julnes
President
Tilco Vanguard Inc.
Snohomish, Wash.

Yeoman's effort

Edward O. Welles's On the Road article, " The Little Engineering Company that Couldn't," tells the story of Yeoman Engineering, a well-run company in Huntington, Ind., that played by all the rules and still couldn't make it. These were among the readers who wrote us to lament the loss.

I started my career with Wabash Technologies, Yeoman's major customer, in March 1950 as an engineer just out of college and ended it with my retirement, in September 1986, as group president of Wabash Magnetics, a subsidiary of Kearney-National, the industrial conglomerate that acquired Wabash in 1981. It was during this 36-year span that Jerry Yeoman, the founder of Yeoman Engineering, and I became not only personal friends but business associates as well. His daughter went to Huntington North High School with our daughter. Stuff like that happens in a town of 18,523 closely knit people.

Way before the days of our entry into the automotive business, Wabash was a leading supplier of epoxy-molded coils for the industrial-control market. Wabash pioneered the in-house development of epoxy-thermosetting molding powders, and Jerry Yeoman designed and built the molding presses we used, as well as the molds that went into the presses.

The result of that joint product development led to Wabash's being a major supplier to the industrial-control market, and completely changed the assembly concept of motor controllers, resulting in reduced assembly costs of 30% or more for our customers. Jerry also sold us the presses at less than half the price of the other presses on the market -- whose design didn't work as well as Jerry's.

Jerry and ultimately "Yeoman in Training" (Wabash's title for Jerry's son, Ed) were not only the best metal machine shop/mold makers in the business; they were also instrumental in our success at Wabash. In the early 1980s, Wabash was increasing its automotive business at the rate of $10 million a year and increased its annual General Motors add-on business from $25 million to $50 million, starting in 1990, thanks to negotiations I'd begun in 1986. However, as much as I tried, I couldn't make Kearney-National management recognize the need to protect Wabash's future by purchasing Yeoman Engineering.