Family-Owned Karate Academy Soars with SBA 504 Real Estate Purchase

TMC Financing helps Karate Instructor Purchase Property for $1.8M

Chinzo Machida and his brother Lyoto learned karate from their father and eventually grew up to become professional competitors for Brazil. Their martial arts skills became so renown, that in 2016 they came to the United States and founded the Machida Karate Academy.

Machida Academy specializes in an evolutionary version of their father’s Shotokan-style karate. This style returns karate to its roots as a self-defense art, while equipping students with techniques effective in popular combat sports.

Within two years, Lyoto saved enough capital to purchase the training facility and with Chinzo’s help, they amassed more than 200 karate students.

By 2020, the Machida brother faced unprecedented challenges. Student attendance dwindled because of the pandemic and Lyoto decided to move to Florida to compete. Lyoto wished to sell the building and relinquish his involvement with the business entirely.

Chinzo was resolved to buy-out Lyoto’s portion of the business and purchase the property to continue his teachings. Lyoto agreed to this exchange, however, the sale had to be completed within six months – otherwise Lyoto had no choice but to offer the facility to the highest bidder.

The question remained: How could Chinzo quickly gain the financing he needed to preserve his business legacy?

The solution: The Small Business Administration’s (SBA) 504 Loan Program

SBA 504 commercial real estate loan: the perfect financing solution

The SBA 504 loan program is overseen by the Small Business Administration and administered by a network of Certified Development Companies, like Financiamiento TMC.  The program offers affordable commercial real estate financing for business owners looking to purchase owner-occupied property at below-market, fixed interest rates.

Chinzo’s research led him to TMC Financing’s YouTube page, where senior vice president of business development Anna Rummelein, explains that unlike conventional financing, which typically calls for 30% down, the SBA 504 loan requires as little as 10%.  Additionally, the SBA 504 interest rates are highly competitive.

Chinzo was incredibly inspired.

“I had originally tried getting a real estate loan through my bank, but I couldn’t afford the 30% down payment,” stated Chinzo. “When Anna explained that I would only have to come up with 10%, this gave me the hope I needed to reach my goal.”

By utilizing the SBA 504 program Chinzo upheld his brother’s selling agreement and bought the 7,520 square-foot facility, located at 24333 Narbonne Ave, for $1.8 million.

Anna Rummelein, SVP Business Development

“The SBA 504 loan was a natural fit for Machida Academy,” Rummelein explains. “With a lower down payment, the business had more financial flexibility at a challenging time. Owning the property opened new revenue streams and new ways to optimize cash flow. For example, Chinzo now has an upstairs space that he can choose to sublet or use as another training room.”

Machida Academy has not only recovered from its all-time low of 40 students, but greatly exceeded its peak. It now enrolls more than 260 aspiring black belts and their karate style has gained a national following.

“I always believed in the business and now I feel I have total control of my life,” Chinzo continues. “I started with no property and almost no business and now I have both – free to teach my students in my own way.”

What is Chinzo’s advice to other small business owners looking to purchase property for their business?

“I highly recommend TMC Financing for anyone who’s interested in the 504 loan,” Chinzo concludes. “TMC supported me throughout the entire loan process. When there was a question, Wendy and Anna were patient, and provided guidance.”

Comuníquese con Financiamiento de TMC to learn more about the SBA 504 loan program.