The Situation: Manufacturer Purchases Property to Build New Factory
A former Wisconsin-based client needed to act fast to secure a loan to buy land on which they planned to build a new industrial building. The new one would be 8,000 square feet larger to allow for expansion. When First Business Bank heard about the project, two other banks were gathering information to provide funding but asked the same questions repeatedly, frustrating our client.
- Time-Sensitive Funding Request
When First Business Bank got involved, two other banks were putting together proposals. However, the banks didn’t understand the cash flow and plans to grow. As a former client that changed banks after a management turnover, the business owner liked that we knew his manufacturing business and gave us two weeks to offer a proposal.
- Lack of Collateral
The business needed to conserve funds to move equipment to the new location, so they didn’t have a traditional 20% down payment. The project, pre-planned for summer of 2020, was rebid by the contractor right after the pandemic hit when commercial construction projects were slow, saving the manufacturer $300,000.
The Solution: SBA 504 Loan from First Business Bank & WBD, Inc.
First Business Bank, partnering with Wisconsin Business Development, Inc. (WBD), provided an SBA 504 loan totaling $2.172 million, which included purchasing the land and constructing the new, larger factory.
An SBA-designated Preferred Lending Partner, First Business Bank’s underwriting and closing team communicated closely with the client to ensure we exceeded expectations.
First Business Bank’s expertise, in partnership with WBD, Inc., affords us the opportunity to work with the SBA directly and helps us to structure an acceptable loan that satisfied the seller, our client, and the SBA.
This land purchase and construction financing was a great fit for the SBA 504 program, which features lower down payment requirements and lower interest rates.