“I had a vision for the educational and play experiences that young children would have at our preschool, but it wasn’t possible to fully achieve it in our previous location,” says Chunru Wen, owner of Joyful Alameda Preschool, a Montessori-based and Mandarin-immersion program in Alameda, CA. “Thanks to TMC Financing and the SBA 504 loan program, we now have the perfect location.”
Here’s how Chunru worked with her TMC team and Golden Bank to secure her new property, located at 1808 Santa Clara Ave in Alameda, and expand her multi-faceted preschool using the SBA 504 loan program.
A leased property limits opportunities
Chunru had nearly three decades of experience as a preschool teacher before launching Joyful Alameda in March 2022. She’s also attained multiple certifications, including as a certified Montessori teacher and Infant/Toddler Specialist certification in Child Development.
She explains, “Children are naturally curious about everything around them, indoors and outside, and when we foster and support their interests, it makes learning more fun.” That’s true, she says, whether they’re learning language lessons, playing games outside, or mastering early-life skills, from tying shoelaces to sharing toys.
Before purchasing property for Joyful Alameda, Chunru leased a space in a house that was approved for daycare use. She was limited, though, in the improvements she could make inside, and she didn’t have space outside for a playground area, games, and exploration of nature – and, significantly, working out of a house limited the licensing that she could obtain.
“It was great to get my business launched there,” Chunru says, “but our capacity was limited by its size and because I couldn’t get the type of license that I wanted for our program, we were also limited in our branding and professional perception.”
Financing for the perfect location
It didn’t take Chunru long to find the right location – a single-story building that was almost 1,500 square feet with a large yard for outdoor play. The next step was to find financing.
“I contacted some banks for a loan, but it wasn’t working out,” Chunru admits. It’s a common challenge for small business owners and one that TMC Financing and partnering banks work hard to help entrepreneurs overcome through the SBA 504 loan program.
This program helps small business owners purchase commercial properties for their businesses. 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.
- Generous funding limits, 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 with a fixed interest rate for the life of the loan. This makes payments predictable and more affordable while stabilizing occupancy costs for decades.
“Although I didn’t have any luck with other bankers, once I met with Golden Bank, it was great. They wanted to help and they introduced me to the SBA 504 loan program and TMC Financing, too,” Chunru says. “I knew I’d found the financing I needed.”
She continues, saying, “Everyone at TMC was so helpful. They provided lots of information, were really patient throughout the process, and worked well with my representative at Golden Bank, Vincent Chen, to make the whole process smooth. It was wonderful!” For her purchase, Chunru contributed 10% owner equity, totaling $98,570 of the total deal of $985,700.
Bringing a dream to fruition
Chunru is thrilled with Joyful Alameda’s new location, because it enables her to bring her full vision for her preschool to fruition.
“Before, in the house, Joyful Alameda was only eligible for a family childcare license. Now, I can build the business and brand as I always intended this to be – a multifaceted and licensed preschool program that helps children learn and grow with joy. We have about twice the capacity, for 25-30 children, so we can serve many more families,” she says.
Anna O’Brien, SVP of Business Development for TMC, says, “For TMC, it was a pleasure to work with Chunru to help make her vision a reality. SBA 504 loans are great for so many purposes and in Chunru’s case, not only did it help her to purchase a property, but in doing so, it helped her vastly increase her business’s credibility, including making it eligible for a higher level of professional licensure. That’s tremendously important for preschools and other childcare businesses and we’re excited to have been part of her growth and success.”
Dreaming of future growth
With Joyful Alameda’s preschool program in its new location since December, Chunru’s already considering opening a related business – a Montessori-based enrichment after-school program for K-5 children that also includes Mandarin studies, like Joyful Alameda Preschool.
“This was the first loan that I ever received for my business, and working with TMC and Golden Bank to buy this property with an SBA 504 loan was really a wonderful experience,” Chunru says. “If I needed financing again, I’d definitely go back for another SBA 504 loan.”
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.
About TMC Financing
TMC Financing is a nonprofit 501(c)(4) Certified Development Company (CDC) with a mission to promote economic development and job creation by helping small businesses access affordable financing. Since its founding in 1981, TMC has provided approximately $16 billion in SBA 504 commercial real estate financing to over 8,000 small businesses across Arizona, California, Hawaii, Nevada, and Oregon. These efforts have helped create more than 63,000 jobs. TMC is recognized as the #1 SBA 504 lender in the nation, offering long-term, fixed-rate financing that empowers small business owners to purchase, construct or refinance real estate and major fixed assets to grow their operations.