{"id":21864,"date":"2023-04-04T07:24:18","date_gmt":"2023-04-04T14:24:18","guid":{"rendered":"https:\/\/www.tmcfinancing.com\/?p=21864"},"modified":"2023-04-04T07:24:18","modified_gmt":"2023-04-04T14:24:18","slug":"kc-hilites","status":"publish","type":"post","link":"https:\/\/www.tmcfinancing.com\/es\/kc-hilites\/","title":{"rendered":"KC HiLiTES Gains Footing in Flagstaff with SBA 504 Building Acquisition"},"content":{"rendered":"

\"\"For over 50 years, KC HiLiTES<\/a> has been a symbol of outdoor freedom, adventure and performance. When the company required additional space, purchasing a building in a community that aligned with its core values was the optimal solution for maintaining their independence and providing resources for growth. By utilizing the SBA 504 Program<\/a>, the company was able to purchase 1751 S Thompson Street in Flagstaff, AZ for $4,217,260 with just a 10 percent down payment and a 25-year fixed interest rate.<\/p>\n

KC HiLiTES<\/a> was founded in 1970 by Pete Kim Brown, an avid outdoorsman, who aspired to \u2018light up the night\u2019 for off-road adventures after realizing current off-road lighting fell short of his needs. Alongside his wife, Carol (hence \u2018KC\u2019), Brown worked in their garage, oftentimes with neighborhood housewives, retrofitting aircraft lights into sturdy housings, and forever changing the landscape of off-road culture.<\/p>\n

KC HiLiTES<\/a> products were immensely popular in the 1980s, appearing in classic films like The Goonies and Back to the Future. They quickly outgrew their garage operations and moved to Williams, Arizona where their headquarters remained for 53 years. In 2015, CEO Alan Wang\u2019s family, long-time KC HiLiTES partners, bought the business from Michael DeHaas, Pete\u2019s son, to continue the legacy.<\/p>\n

\"\"Wang learned of the SBA 504 Program and knew that was the most advantageous way for KC HiLiTES to purchase a building.<\/p>\n

The SBA 504 loan allows business owners to purchase fixed assets, such as real estate or equipment, at long-term, below-market fixed interest rates. SBA 504 loans<\/a> are fully amortized over a period of 25 years and most businesses qualify for just ten percent down payment.<\/p>\n

\u201cTen percent down is huge,\u201d says Wang. \u201cIt allowed us to keep more cash flow for operating and growing the business. By saving capital from the low down payment, we were able to invest in R&D, invest in our people, hold inventory, the list goes on. The rates were very favorable as well.<\/p>\n

\u201cOverall, all the components of the 504 loan beat the conventional financing options. The whole 504 package made this purchase possible.\u201d<\/p>\n

John Rockwell<\/a>, vice president of business development facilitated the $4.2 million deal on behalf of TMC Financing.<\/p>\n

\u201cThere are not a lot of properties in Flagstaff that fit the needs of KC HiLiTES<\/a>. When their ideal facility became available, we had to move fast to meet the seller\u2019s deadlines,\u201d explains Rockwell.<\/p>\n

Wang sites TMC Financing’s guidance as a major factor to complete the transaction quickly.<\/p>\n

\"\"<\/a>\u201cJohn<\/a> was very nurturing in terms of all the gears and knobs that come with this transaction. He and the TMC Financing team coached us through it \u2013 and did it very quick,\u201d states Wang.<\/p>\n

\u201cOne of our core values is that the quality of relationships drives the quality of results,\u201d Wang continues. \u201cWhen we met with John and Ron Pak [vice president SBA Business Development Officer] with Citi, it felt like the right people to do business with. We knew they were people we could trust to take us through that process and close the deal.\u201d<\/p>\n

The SBA 504 loan program<\/a> is a financing partnership between a borrower, a conventional lender (in this case, Citi Bank), and a non-profit\u00a0Certified Development Company<\/a>\u00a0(CDC), like TMC Financing. \u00a0The unique structure of the SBA 504 loan is what enables small business owners to obtain the most attractive terms when purchasing real estate. The financing package looks like this:<\/p>\n