Building in a Recession
During the 2008 recession, conventional manufacturing was down anywhere from 40-60%, as you can see in the figure above. Hundreds of thousands of companies went out of business and just couldn’t survive.
Luckily, during this recession, the optics manufacturing industry was not hit as hard as some. Len Chaloux’s company, Moore Nanotech, made precision machine tools that served a niche market in optics, and so the recession didn’t hit as hard as it did other companies.
During this recession, Mr. Chaloux and the owner of the company, Newman Marsilius, decided they wanted to build a brand new facility. The business was expanding, and they needed a larger, temperature controlled space.
They found a beautiful piece of land in Swanzey, close to the airport. They decided to buy the land, and began making plans for the 40,000 square foot facility. There was only one problem. They needed a loan for 6 million dollars to build the facility.
They had three loan offers. One from Bank of America, one from Wells Fargo, and the third they decided to get one from a much more regional loan offer from TD bank.
As the market started crashing, Wells Fargo and Bank of America pulled their loan offers. They didn’t want to lend the money during a recession. When talking to TD bank, the last hope in getting this loan, this is what TD bank said.
Mr. Chaloux – “TD bank was absolutely phenomenal. We met with TD bank and they said “Yep, you know the markets crashing, however we are a bank. If we’re going to loan money to anybody it will be to businesses like yours. You have a proven success rate. Proven track record.” They followed through with the loan for us.”
so TD Bank lent the money, and Moore Nanotechnology received the loan. Nanotech signed the loan agreement to borrow the money and build the facility on December 18th, 2008. This was around when the financial markets hit their lowest.
Mr Chaloux – “We signed that loan agreement for almost 6-million-dollar loan. And because the LIBOR had dropped so far, we saved 600,000 dollars on the value of the loan and interest by signing on that day. But I’ll tell you what, my hand was shaking like a leaf signing those loan documents. I was pretty damn nervous.”
The LIBOR stands for the London Inter-bank Offered Rate. It is an interest-rate average calculated from estimates submitted by leading banks in London. The loan they received was tied to the LIBOR, so thats why they were able to save 600,000 dollars on the value of the loan.
Because of the downturn in business, the company had an excess amount of time to work with the architects. They were able to put a lot of personal effort into the design and construction of the building.
Contractors were begging for work. They were able to get really good prices because contractors had no work because of the current recession.
Mr. Chaloux says “So, it was a leap of faith, but it was a phenomenal leap of faith.” Talking about the events that led up to the ribbon cutting of the facility.
Mr. Chaloux was also given an award in 2017. He was awarded the “Business Excellence Award,” in the manufacturing category for a small organization. Keene State College also bestowed Mr. Chaloux with with the Honorary Doctor of Science for his contributions to the field of precision manufacturing systems and processes.
Moore Nanotechnology Systems is located at 230 Old Homestead Hwy, Swanzey, New Hampshire.