Specialty Contractor Purchases Building With SBA 504 Loan to End Logistical Nightmare
CYC Commercial Interiors Inc., a specialized engineering company, obtained 90% financing through the SBA 504 Program to purchase the building located at 2428 Pratt Avenue, Hayward, CA for $3.2 million. Prior to this acquisition, owner Cesar Cavazos, was leasing roughly 7,000 square feet of office and warehouse space, spread across various sites. Purchasing their property enabled Cavazos to escape a logistical nightmare and consolidate their operations to one stable location.
CYC focuses on commercial wall coverings such as wallpaper, graphic murals and most importantly acoustical wall treatments. Through acoustical augmentation, CYC helps their clients engineer their spaces to have less unwanted noise.
“The Bay Area is known for innovation, biotech and architectural advancements – all fields that require thought leadership and discussion,” explains Cavazos. “Such innovation has the potential to be stifled in a noisy room. That is where we come in. CYC can help build a space where there is noticeable noise cancellation, creating an optimal work environment.”
Cavazos began his career as an 18-year-old apprentice. After 20 years in the industry, he decided it was time establish his own company. Cavazos founded CYC Commercial Inc. in 2015 and it has been thriving ever since.
“We have grown leaps and bounds in five years. In our first year, we only had five employees and our revenue totaled $1 million. Now we have 35 employees and our total revenue is around $15 million. We are incredibly proud.”
During CYC’s early years, Cavazos had to continually lease additional space to house their materials. “Every 6 months or so we would have to search for more and more warehouse space. My engineers would have to travel to various locations to gather the supplies we needed for our clients. Our materials were stacked to the rafters. It was a logistical nightmare – we had hit a plateau and we knew something had to change. We knew it was time to stop leasing and purchase a building in one centralized location.”
By utilizing the SBA 504 Loan Program, Cavazos was able to purchase a 11,882 square–foot industrial building with only a 10% down payment at a below-market interest rate fixed for 25 years.
“I had learned about the SBA 504 Program through a friend, but I had no idea how advantageous the terms were and how easy the process would be,” Cavazos stated. “The down payment and low interest rate are what made my dream of property ownership possible. We had been searching for the right building for several years – then finally, with TMC’s help, we secured a building.”
Bruce Whitaker, senior vice president, who facilitated the deal on behalf of TMC Financing explains, “The industrial landscape in the Bay Area is extremely competitive. For a company like CYC, to be able to stabilize their occupancy costs for the long term is vital. Instead of leasing multiple locations, Cavazos can now oversee operations and manage his inventory at just one central location.”
“Working with Bruce and TMC made the loan process much simpler than I expected,” Cavazos said. “Bruce had the expertise and knowledge to get the job done. I had heard rumors that the 504 loan application is lengthy and extremely difficult. TMC proved me wrong. They did things behind the scenes and knew the process like the back of their hand. We were able to close on our loan so effortlessly – it was impressive.”
More About SBA 504 Program
The SBA 504 Loan Program provides small and medium sized businesses with long-term, fixed-rate financing that can be used to finance commercial real estate purchases, construction/renovations, equipment, soft costs and closing costs. By enabling owners to keep their capital working to grow the business and create jobs, the 504 program provides businesses and communities with long-term stability. The 504 Loan is administered by a Certified Development Company, such as TMC Financing, and loans are granted in conjunction with a conventional lender.
About TMC Financing
TMC Financing is the No. 1 provider of SBA 504 commercial real estate financing nationwide. For nearly 40 years, TMC has provided $9.7 billion in financing across California and Nevada. More than 5,700 businesses have benefited from this financing, resulting in the creation of an estimated 60,000 jobs. For more information on SBA 504 loans and the local businesses they support, visit www.tmcfinancing.com.