Builder supply firm found way to grow after recession
As Published in:San Francisco Business Times
In 2010, US Superior Stone and Tile was paying over $40,000 a month in rent and reeling from a 40 percent drop in sales.
Two years later, the San Leandro-based supplier of granite, cabinets and tile is peddling its products in a sleek new showroom, and business has climbed about 30 percent.
The difference, manager Randi Siu says, was a roughly $8.39 million loan, about $3.73 million of which was backed by the Small Business Administration. The loan enabled the company to buy a larger facility in 2010. With all the space, US Superior can keep nearly twice as much merchandise on hand and has even taken on tenants to help with the mortgage payment, Siu said.
“When the national economy was at the bottom, this loan gave the company the opportunity to get a bigger space and take a bigger share of the market in the Bay Area,” said Siu, who has served as manager since 2005. “We are very thankful to the SBA.”
The SBA 504 loan was serviced and financed by TMC Financing. With commercial rents high in the Bay Area, the SBA’s real estate loan program has been a source of relief for many small companies, said Mark Quinn, district director of the SBA for San Francisco. US Superior would have had to settle for a less expensive building without the loan, Siu said. The SBA’s 504 loan program calls for borrowers to pay just 10 percent of the cost up front, which worked out to a roughly $1.16 million investment for US Superior.
“Businesses can buy real estate with more leverage, and they’re not putting all of their working capital into the deal,” Quinn said.
US Superior opened up shop in Oakland in 2003 under the leadership of Ming Liang, a long-time contractor who still owns the company. Its inventory was long limited to granite and cabinets, and the slew of new products that the company now offers — including travertine and plumbing supplies — has attracted many more customers, Siu said. US Superior was closed to the public on Sundays, but customers kept knocking on the door, so the store is now open seven days a week.
A number of stores selling similar goods have opened up in San Leandro and Hayward in recent years, said Chris Blair, maintenance supervisor for the Felson Companies, which manages 13 apartment complexes in the East Bay. But Blair turns to US Superior exclusively when purchasing cabinetry, granite and plumbing fixtures for apartment renovations because none of its competitors match its selection, he said.
“Their showroom is a real step up from anybody else that I’ve dealt with,” Blair said. “They are definitely players in the Bay Area.”
Before landing the SBA loan, US Superior was worried it would have to lay off some of its workforce, Siu said. Now, the company is bringing on new employees to handle the volume of visitors that the showroom has attracted.
The company’s ranks have grown from 12 employees in 2010 to 25 today, and three or four people will likely be hired in coming months, Siu said. Several of US Superior’s recent hires speak Spanish. Whereas the company once did business primarily with the Chinese community, it has drawn a wider range of customers in recent years.
Strong sales in the Bay Area have inspired the company to set its sights south. US Superior hopes to forge relationships with contractors in Los Angeles to boost sales further, Siu said. It already does business with clients in New Jersey, Washington and Hawaii, suggesting more out-of-state deals could be in the company’s future, she noted.
“Of course, it’s best to be nationwide,” Siu said. “We really hope for that one day.”