Situation: Success Creates Challenges For Wellness & Weight Loss Business
A thriving Wisconsin wellness and weight loss business faced an enviable challenge: client demand outgrew their physical office. While the business owner brought deep industry expertise and maintained strong cash flow, their limited square footage constraints forced them to restrict the number of new patients they took. Seeking financing options to support their growth, they reached out to First Business Bank's SBA Lending team to explore solutions. Challenges included:
- Limited SBA Lending Experience
The owner started the wellness and weight loss business in a single room at a local clinic and expanded to their current space through a financing arrangement with their landlord. They were unaware they could qualify for an SBA 7(a) expansion loan that could provide capital with no downpayment required, allowing them to preserve their cash reserves.
- Limited Office Size Created A Bottleneck
Growing patient demand outpaced capacity, resulting in a lengthy waitlist and the business turned away new clients. Space constraints also prevented the business from introducing new services that could expand their market reach.
- Time-Sensitive Construction Opportunity
With their landlord also serving as general contractor, build-out of the adjacent office to create a larger facility could begin immediately once they secured financing. This timing was crucial to address the growing waitlist and maintain the business’s momentum.
Solution: SBA 7(a) Loan Powers Wellness Center’s Zero-Down Construction Expansion
First Business Bank, an SBA Preferred Lender, provided a $660,000 SBA 7(a) loan package to finance construction of adjacent space and provide working capital for the expansion. Benefits of the project included:
- Strategic SBA 7(a) Deal Structure
This project's details allowed First Business Bank to structure the SBA 7(a) loan with no down payment requirement, allowing the business to maintain its cash reserves. This zero-down financing approach aligned with SBA guidelines for expansion projects while supporting the owner's goals to preserve cash.
- Seamless Expansion Experience
Despite previous concerns about SBA 7(a) loan complexity, the owners found First Business Bank's process straightforward and efficient. The expansion allowed them to serve their growing waitlist and introduce new services while maintaining uninterrupted operations in their current location. - Optimal Location Strategy
The experienced owners maximized their existing client relationships by expanding into the adjacent space, ensuring business continuity while increasing their service capacity.
