“After looking for years, we found the perfect location for our packing and shipping operations,” says The Caviar Co. owner Petra Higby. “Our property broker recommended the SBA 504 loan program and TMC, which made the rest of the purchase easy.”
In their new Berkeley, CA, location, Petra and her team are building on more than a decade of success as they provide high-quality and sustainably sourced caviar and roe to connoisseurs, first-time tasters, and everyone in between. Here’s how an SBA 504 loan from TMC Financing helped Petra secure her dream property.
Discovering an opportunity
When Petra and her sister, Saska, launched The Caviar Co. in 2015, their inspiration came from one of Petra’s previous roles – as the marketing lead for a caviar farm in the San Francisco area.
“I’d been working for the farm for a while and loved everything I was learning about caviar and the growing industry around sustainable caviar farming,” Petra says. “With a caviar farm, though, you’re typically producing one type of caviar and there’s such diversity and richness within the industry. I wanted to explore that and bring that to others, too.”
She saw a great opportunity to pivot her passion into a business that would broaden long-held perceptions of caviar and introduce it as an affordable luxury for everyone, while teaching people about the industry’s ancient traditions and contemporary aquacultural goals.
Petra and Saska launched with several business clients and corporate accounts. In 2017, they opened a retail storefront in San Francisco, as well as an online store. After Petra took on sole ownership in 2018, she also opened The Caviar Co. Caviar & Champagne Lounge in the Marin County, CA, waterfront town of Tiburon.
Growth through vertical integration
Sourcing responsibly farmed caviar and roe of the highest quality was key to the business model and offering it at reasonable prices was essential – and maintaining exceptional standards meant bringing aspects of the process in house.
“Vertical integration has always been a key element of our business strategy to give us better control over product quality, branding, and customer care,” Petra explains about the decision to handle packing and shipping within The Caviar Co. “We leased a space for that part of the business but outgrew it long ago and couldn’t find the right property, either due to the location or simply because they were just too big.”
In the San Francisco Bay region, right-sizing isn’t just a preference – it’s critical because excess square footage also means extremely high costs, because commercial real estate is at a premium.
The SBA 504 loan and TMC: Securing a dream property
“I worked with an excellent commercial real estate broker, Paul O’Drobinak at Colliers, to find the perfect property – it was the right location, the right size, and turnkey. He also recommended TMC Financing and the SBA 504 loan program – which, I admit, I’d never heard of before,” Petra says, as this was the first commercial property purchase for the business.
SBA 504 loans are made in partnership between the business owner, a bank, and a certified development company (CDC), like TMC. It’s an outstanding option for small business owners who want to purchase commercial property for their businesses because it offers:
- A down payment of only 10% for most projects, which is significantly less than the 30-40% that’s required for conventional commercial mortgages. For a property like The Caviar Co., that would mean a down payment of $182,500 for a $1,825,000 deal.
- A fixed interest rate for the life of the loan, which can be from $50,000 to $5.5 million for the SBA 504 portion, with no maximum for the first mortgage. TMC has financed projects valued from $500,000 to $44 million.
- A 25-year term for most SBA 504 projects. This makes payments predictable and more affordable while stabilizing occupancy costs for decades.
Petra connected with TMC Senior VP Bryce Fennell, who explained the advantages of the SBA 504 loan program and guided the application and underwriting process.
“Bryce and TMC were terrific,” Petra says. “I had no experience purchasing commercial property, but they made it as straightforward and simple as possible. And since we have a great relationship with Bank of San Francisco, our commercial bank, it was ideal to be able to work with them on this, too.”
Bryce adds, “It’s TMC’s goal to help small business owners purchase the right commercial property for their businesses – and knowing how hard it can be to find the perfect location makes our work both important and urgent. It was a pleasure to help Petra and The Caviar Co. secure this home for their behind-the-scenes work and we’re excited to see how the business continues its successful evolution through this acquisition.”
Advantages that grow along with the business
Petra says, “Now, we have even more touchpoints on our process and customer experience. And while our payment is about twice as much as our lease payment, at almost 3,500 square feet, we’ve got more than three times as much space and we’re building equity while better managing costs.”
The larger space also means room for additional staff to support growth. “We hired four new team members in December in anticipation of the purchase,” Petra explains, “and we’re aiming to bring on three more.” That would take The Caviar Co. team from 11 to 18, providing great opportunities in this growing business.
Make your business dreams a reality with TMC and the SBA 504 program
“As business owners, we often don’t have time to think about the funding we need until we’re deep into an opportunity or challenge, so be proactive and know your options. That way, you can make better decisions,” Petra offers when asked for insight to share with other entrepreneurs. “I was fortunate to have a great broker who gave me excellent guidance and helped me connect with TMC and the SBA loan program. Bryce and the TMC team were amazing and responsive, too, and now, we have our ideal property.”
If your business is located in our service area of California, Arizona, Nevada, Hawaii, and Oregon, contact TMC Financing to get started. If your business is located outside of our service area, try the SBA’s Lender Match tool to find a qualified certified development company (CDC) lending partner near you.