HCDC Borrower Hosts Snoop Dogg for MLB All-Star VIP Party; HCDC Helps Wegman Company Consolidate Operations into a Single Building
Wegman Company, a full-service office furniture design and installation company, stumbled on the old Cincinnati Enquirer printing facility in the Queensgate area of Cincinnati and saw an opportunity to consolidate its operations from five warehouses into one. “But since we owned five other buildings, we couldn’t afford it,” says Wegman Company president Scott Wegman. Wegman got in touch with Randy Church at Spring Valley Bank through a broker, and Mr. Church introduced Mr. Wegman to HCDC and the loan options we offer.
Wegman Company used two different loan types through HCDC to purchase the 110,000-sq ft building. The first loan is the Ohio 166 loan. The Ohio Regional 166 is an attractive, fixed-interest rate loan with a lower down payment. The Program offers up to a 15-year term for real estate, and monthly payments are lower, so businesses can keep their cash for working capital. The maximum amount for this loan is $500,000.
The second loan that Mr. Wegman used to help purchase his building is an SBA 504 loan. The SBA 504 loan packages two loans together, one from HCDC and one from a private lending partner, such as a commercial bank or credit union. The structure of the loan is typically 50/40/10, where the lending partner makes a commercial loan (typically 50% of the total project cost), and holds a first mortgage. HCDC provides a subordinated, fixed-interest rate, long-term loan for up to 40% of project cost up to $5 million ($5.5 million in special cases). The borrower then typically provides an equity injection of as little as 10% of the project cost.
Mr. Wegman estimates the move into the new building will be completed in June 2016. The transition started in February 2015. “This move will be great for us. We are going from 450,000 sq ft in the old buildings to 110,000 sq ft in the new building, but with this building we can fit into a smaller footprint using racks. The move has allowed us to review our workflow processes and how we do business. We will have 40% efficiency savings, 14 docks instead of four, and employee morale is already up,” says Mr. Wegman.
The new building has also brought new business, one of which was a complete surprise. “Major League Baseball chose our new building to host a VIP, invitation-only party two days before the All-Star game in 2015. The event was called, ‘MLB All Star Bash 2015,'” says Mr. Wegman. It had 2500 attendees and started at 10 pm and went until 3 am the next morning. The celebrity bash featured performances by Snoop Dogg and Macklemore and was attended by Nelly, Andy Dalton, and the Mayor of Cincinnati among others.
Frank Keane, SBA 504 Loan Program Fiscal Agent Weekly Market Commentary
Treasury rates ended the week higher but improved from their weakest levels prior to the 1Q16 GDP report, and a reminder from the FOMC that it will pursue a gradual approach to higher rates. The post meeting announcement offered no hint of a June increase and that helped rates decline and, coupled with weak corporate earnings, sent equities lower.
Wednesday’s GDP report renewed signs of caution from businesses and consumers. It is the weakest quarterly report since 1Q14 and a sharp reduction from 4Q5’s report of -1.4%.
Video: What Costs Can Be Included in an SBA 504 Project?
Costs that are eligible to be included in an SBA 504 project can be classified into five components: Fixed Assets, a Building or Building Improvements, Professional Fees, Refinancing of Existing Debt, and Interim Financing. Watch the full video for details.[youtube id=”vH28WowjYSU” mode=”normal”]
SBA 504 Loan Interest Rates for May:
4.320% at 10 Years
4.194% at 20 Years
Loans Funding This Month
| Dubwerx, Inc.|
$1,245,897 Project Cost
HCDC Borrowers in the News
|6 caskets, 36 pallbearers and a funeral director’s tears|