David Cappello Secures 98% LTV for iGel Beauty to Double Corporate Facilities with SBA 7(a) Loan
When a young and rapidly growing NJ based beauty company – a manufacturer of nail polish and salon related accessories — decided they needed to expand their corporate offices and production facilities, they approached David Cappello of Progress Capital Advisors to discuss financing options and how to best leverage their assets for growth.
The Company is a leading innovator and distributor of nail polish, accessories and supplies designed for direct to consumer and B2B sales channels. They import large quantities of nail polish and materials from sources in Asia then mix, pack and ship from their US facility. The company has been operating out of a 12,000 SF leased facility that has reached production capacity.
When a 27,467 SF flex building in Toms River went up for sale, the borrower knew it was a perfect opportunity for them to acquire the property and move their operations into the larger, more functional space. In initial discussions with Cappello a requested $1.6 MM loan, representing an 80% LTV, was needed in order to acquire the facility. But, expansion meant not only securing the right size facility but also making sure the company had working capital to keep their operations from slowing down during the transition. David suggested using an SBA 7(a) loan to maximize the loan proceeds providing funds not only for acquiring the subject building, but also for working capital.
Although the perception of SBA loans is that they are very cumbersome and labor intensive, David was able to manage the entire process so that they could focus their attention on running their business. As a result, David was able to produce a loan commitment from a preferred SBA lender in under 30 days. He walked his client through the structure of the loan and made sure he focused on every necessary detail. Additionally, he worked in tandem with the borrower’s insurance agent, title company and attorney to ensure a smooth closing.
The end result for the borrower is as follows:
- $2,000,000 Loan
- 98% LTV
- Prime + 1.75% (Business had less than 1 full year of operations)
- Declining Prepay 3,2,1
- 25 Year Term
- 25 Year Amortization
Progress Capital is a commercial real estate advisory company serving clients since 1990. With over $40 Billion in closed loans and $150 Million of directly funded bridge loans, we will get you to the closing table… Plain and Simple. #thatsProgress
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