“As a manufacturer, the flexibility that the SBA 504 provides, including the low 10% down payment, is essential,” says Rick Albertini, the second-generation owner of Phenix Truck Bodies and Van Equipment in Pomona, CA. “It means we can keep more capital on hand to invest in equipment, machinery, and staff rather than tying it up in a larger down payment.”
Here’s why he chose TMC Financing and the SBA 504 loan for a second time to bring Phenix’s most recent acquisition – a nearly 184,000-square-foot facility on 13 acres – to fruition in partnership with Enterprise Bank & Trust.
Nearly a half-century of service and success
After emigrating to the U.S. from Argentina, Rick’s parents started Phenix in 1978 as a commercial-truck-body manufacturer serving a range of industries, including fire departments, utilities, and other commercial and government agencies. Rick took on leadership in 1986.
“We customize chassis from other manufacturers, designing and building all the components, like hydraulic systems, digging equipment, storage, and more. Each type of truck and van is very specialized for each client and use,” Rick explains. “Our first clients were local branches of federal agencies and utility companies, including SoCal Gas and the USDA Forest Service, and we’re proud that they’re still among our clients.”
A need to expand manufacturing capacity
“Our client base has grown, as have the types of customizations that we offer, so we have divisions for light-duty trucks and vans and heavy-duty trucks,” Rick explains about the need for increased manufacturing capacity. “Prior to the expansion, we’d complete about 3,000 to 4,000 light-duty orders a year and about 600-900 for heavy duty. With our new facility, we can increase our capacity by about 60-70%.”
Finding the right location in an area with little available commercial property and high costs could have been time-consuming and difficult, but Rick says that the excellent team at the City of Pomona – including Office of Economic and Business Affairs Deputy Director Ata Khan and Senior Planner Alina Barron of the Planning Division – led him to the site at 1301-1345 E. Lexington Avenue.
Rick says, “I was meeting with them about other matters and they let me know about the site. We went to see it with our broker and I was pleasantly surprised. It was a manufacturing plant that was winding down and it was easy to see how great it would be for Phenix. It was an excellent find and I’m really grateful to the economic-development team for suggesting it.”
Rick chose TMC and the SBA 504 loan program again
The next step was financing, and Rick didn’t hesitate to reconnect with TMC SVP Dean Aloe for another SBA 504 loan based on his experience from a previous acquisition.
“It was an easy decision,” Rick says. “The SBA 504, Dean, and the TMC team were excellent the first time around. The banker we worked with, Ken Kross, had moved to Enterprise Bank & Trust, and he was terrific, too, so we brought the team together again.”
The acquisition totaled $24.4 million, with a 10% down payment – a tremendous advantage of the SBA 504 loan program, as conventional commercial mortgages typically require 30-40%. It also offers loan terms up to 25 years with a fixed interest rate, which makes payments predictable for the long term.
“The purchase of a large-scale manufacturing property like this can be inherently complex,” Rick says, “but Dean and the TMC team are capable, communicative, and responsive, which takes the stress out of the process. And, they worked so well with our bank partner that for such a big project, it went really smoothly.”
In addition to the acquisition, the project included site and facility improvements including parking-lot work, perimeter fencing, security upgrades, and warehouse improvements.
“In terms of size and scale, this was one of the larger projects that TMC has worked on recently,” adds Dean. “But Rick and his team are consummate professionals and that made it easy for everyone. It’s exciting to see this come together now and to know that this is one more step in Phenix’s larger growth plans. If we can help as Rick moves forward, we’d love to be a part of Phenix’s expansion again.”
Further strengthening the local economy
Along with Phenix’s physical-capacity expansion, Rick says, “We expect to add about 60-70 more employees, including around 50 manufacturing jobs. The others will primarily be in engineering and design, administration, and human resources.”
He continues, “Our growth is due to the strength of our team and as we plan for the future, the most important thing is that Phenix remains a great place to work. As a specialty manufacturer, people join us because they enjoy designing and building our products. That’s at the heart of our work and we’re thrilled that we can add to our team again, thanks to this property.”
TMC: A valued partner for SBA 504 deals
“If you’re considering commercial property for your business, make sure you have all financial documentation in place, then find an SBA preferred lender – including TMC, if you’re in their service area. They know the requirements and lending partners and will help you find the best terms to make your project a reality.”
If you’d like to learn more about buying owner-occupied commercial real estate for your small business, TMC can help. To learn more, contact us today.
About TMC Financing
TMC Financing is a nonprofit 501(c)(4) Certified Development Company (CDC) with a mission to promote economic development and job creation by helping small businesses access affordable financing. Since its founding in 1981, TMC has provided approximately $16 billion in SBA 504 commercial real estate financing to over 8,000 small businesses across Arizona, California, Hawaii, Nevada, and Oregon. These efforts have helped create more than 63,000 jobs. TMC is recognized as the #1 SBA 504 lender in the nation, offering long-term, fixed-rate financing that empowers small business owners to purchase, construct or refinance real estate and major fixed assets to grow their operations.