Earlier this year, Jim Tankersley, owner of Laser-Tronics, a machining and laser-engraving business based in San Marcos, got a call from his landlord. She was selling the property, she told him, and was giving him the first chance to make an offer on it before she put it on the market.
Tankersley knew it was an opportunity he couldn't afford to pass up. He was happy with the 18,000-square-foot warehouse that had served as Laser-Tronics' home for 14 years. Plus, if someone else purchased the property, he would have to find a new facility and move his six gargantuan computer numerical control (CNC) machines, a daunting prospect.
"Each machine weighs 30,000 pounds, so it would have been a big expense and a huge task to move them," explained Tankersley, who started Laser-Tronics in 1987. "The opportunity to buy the building suited us real well."
A 40-year veteran of the manufacturing and machining business with a strong background in the aerospace industry, Tankersley uses the sophisticated machines to cut computer frames, auto parts and other products out of raw aluminum. Laser-Tronics' reputation for precision and service has earned it repeat business from clients in the aerospace, computer and other industries. With a staff of five -- which includes Tankersley's wife and son -- the company did $1.2 million in sales last year.
Due to a death in the family, Tankersley's landlord wanted to close the sale quickly. So Tankersley had to act fast to come up with the necessary financing for the $2.2 million purchase. He turned to his bank of 12 years, Union Bank, and with the help of loan officer Denise Thrapp, secured 50 percent of a 90 percent fixed-rate 504 loan.
Thrapp then introduced Tankersley to SBA loan expert Ken Rosenthal of CDC Small Business Finance. With Rosenthal's guidance, Tankersley was able to take advantage of SBA-guaranteed financing for the remaining 40 percent of the money needed -- minus a 10 percent down payment -- to buy the building.
"Without the SBA 504 program, borrowers like Laser-Tronics would be required to make a down payment of between 20 and 25 percent of the property price, which can be a huge burden for a small company," Rosenthal stated. "With an SBA loan, they not only receive fixed financing terms that are below the conventional market rate, they also get to preserve working capital that they can use to help grow their businesses."
CDC Small Business Finance is a private, nonprofit company certified by the SBA. It provides access to capital for small businesses throughout California, Arizona and Nevada. Working with the SBA, CDC is the largest of more than 260 certified development companies nationwide dedicated to providing a wide range of low-cost financing products for small businesses.
"Going with the SBA loan allowed me to reduce my down payment to just 10 percent," said Tankersley. "CDC and Union Bank made this a very good experience for me. The whole process was quite simple -- we were able to use the original paperwork from Union Bank rather than having to start all over."
With the help of Union Bank and CDC, it took only six weeks from that initial phone call from Tankersley's landlord for him to go from being a renter to a property owner. And with more cash for his business, Tankersley is well positioned to continue to grow Laser-Tronics.
To learn more about Laser-Tronics, call (760) 591-3051. For more information about CDC Small Business Finance, contact loan officers Ken Rosenthal and Mike Sarthou at 800-611-5170.