When you buy your building with a 504 loan, you’re married to that payment for 15, 20, 25 years – there’s no increase. For the stability of the business, it made sense to use the SBA 504 program.

Andrew Westbrook and John Lund, co-owners of Eagle’s Nest Harley-Davidson in Lathrop, Calif., Know a thing or two about speed. Over the years in the powersports industry, the duo have built three of the most successful dealerships in the Harley-Davidson global network.

Owning property for the business has been a big part of Eagle’s Nest growth.

In March 2014, Westbrook and Lund took their first big step. Using a Harley-Davidson “acquisition loan”, they purchased a dealership and over time tripled the dealership’s size and staff.

Today it is one of the top 25 Harley-Davidson dealers in the United States.

However, the partners knew that if they wanted to continue growing their business, they would need a larger and more flexible home loan. Fortunately, they chose the Small Business Administration (SBA) 504 program.

“Business sustainability” was essential for Eagle’s Nest Harley-Davidson

Westbrook and Lund’s initial acquisition loan left them with some challenges. With a 7-year lease and three 5-year extension options, they found themselves regularly renegotiating the rent.

Homeowners decided it was time to find a real estate financing option that would allow them to go from renters to owners. Using the 504 program to buy a property for their dealership would eliminate volatile and unexpected rent increases.

“When you buy your building with a 504 loan, you’re married to that payment for 15, 20, 25 years – there’s no increase,” Westbrook explains. “For the stability of the business, it made sense to use the SBA 504 program.”

SBA 504 Loan Program Helps Businesses Buy Commercial Properties at Affordable Rates

Most for-profit businesses are eligible for the SBA 504 loan program offered by TMC Financing. This affordable and accessible commercial real estate loan offers down payments of as little as 10%, coupled with a fixed interest rate below the market for 25 years.

Westbrook and Lund already had some experience with the Small Business Administration, as they had previously used an SBA loan to purchase their franchise in Washington state.

The 10% deposit was instrumental in making this all possible.

“Running a new business requires a lot of capital,” Westbrook explains. “Our initial SBA loan allowed us to get a 10% down payment instead of 25%, which is a big savings. We were able to buy a property and keep working capital to spend on other business expenses. ”

When it was time to grow even more, the SBA 504 loan program was a natural fit. However, Eagle’s Nest was hitting the SBA’s lifetime loan limits.

With the help of funding from TMC, Eagle’s Nest funded its growth through the SBA 504 green energy program

Eagle’s Nest Harley-Davidson was in a very good financial position. However, homeowners were unwilling to settle for a conventional loan with a large down payment and other onerous restrictions. A colleague suggested that they speak to Jim Azevedo, senior vice president of business development at TMC Financing, to explore their options. It turned out to be a fateful conversation!

Azevedo suggested that they take advantage of the SBA 504 green energy program and add energy efficiency features to the new construction. By including green technology in an acquisition project, a borrower can exceed traditional loan limits.

Eagle Nest qualified for the energy efficiency program by installing solar panels on the roof, which reduced their energy use by 10%. By choosing this financing option, Eagle’s Nest could finance the entire project and enjoy the benefits of the attractive 10% down payment of the 504 loan.

“As part of the SBA’s energy efficiency program, the 504 portion of the financing package is increased to a maximum of $ 5.5 million,” Azevedo explains. “Additionally, there is no limit on the total project cost, so many projects over $ 25 million can still qualify for a 10% reduction, even with ongoing SBA loans.”

Would Westbrook recommend TMC Financing’s SBA 504 loan program to others in his industry?

“Absolutely, I definitely would,” says Westbrook without hesitation. “Especially when you’re focused on your business, you don’t even know where to start looking for financing options sometimes. Everyone at TMC Financement reacts very quickly.

About TMC financing

TMC financing is the no. 1 SBA 504 commercial real estate loan provider in the Western US, helping small businesses grow in California, Nevada and Arizona.

Founded in 1981, TMC is the West’s first certified development company and has funded projects worth more than $ 10 billion in California, Nevada and Arizona. Approximately 6,000 businesses have benefited from this funding, resulting in the creation of approximately 60,000 jobs.

Share the article on social media or by email:


Previous

Raft Motors announces good news for dealers, Ford India employees

Next

LMP Automotive Holdings, Inc. acquires 5 McGavock dealerships in Texas | KLBK | KAMC

Leave a Reply

Your email address will not be published.

Check Also