SBA 504 Loan Helps Entrepreneur Expand to a Third Location [Case Study]
SBA 504 Loan Helps Entrepreneur Expand to a Third Location [Case Study]
Commercial Real Estate Loans
Small Business
Learn how this small business is thriving after an SBA 504 loan helped with the purchase of a building to accommodate growth and expansion.
Aspire Physical Therapy:
Owned by Aaron McGuinness, Aspire Physical Therapy is dedicated to individualized, expert rehab and sports performance. Aspire offers the very latest evidence-based practice and skills while striving for excellence in customer service. The Aspire team continuously works to grow, support, and improve quality of life by optimizing patient movement and getting the patient out of pain. Aaron started the business to serve people seeking physical therapy in the Los Angeles and La Canada areas.
The Situation:
Aaron built a thriving business that attracted many new clients, yet found himself having to turn business away due to space constraints. He was operating Aspire out of two leased facilities and realized expanding to a third location would help him meet the needs of his current and future clients and allow him to add additional doctors to scale the business.
The Solution:
Aaron began the search for a third property to lease or buy to better accommodate his clients and future growth. Throughout his research he realized buying a commercial property would provide great advantages. In learning about the SBA 504 commercial real estate loan he realized he could benefit from fixed occupancy costs, elimination of the risks associated with leasing, a below market rate, and only a 10% down payment.
Aaron reached out to broker Kyle Barratt at CBRE, who had assisted him on his leases. Kyle put Aaron in contact with CDC Small Business Finance’s VP, Senior Commercial Lender, Dean Aloe. Dean worked closely with Aaron to learn all about Aspire Physical Therapy and his future business goals. Aspire had great industry experience, a growing reputation, operational expertise, and a positive trend in revenue, which made them a good candidate for an SBA 504 loan.
Dean worked closely with Aaron throughout the loan process and was able to get the deal done quickly to meet the closing date.
The Result:
The addition of the third location positions Aspire Physical Therapy to grow by at least 30% and will allow them to grow the team and hire additional doctors. And most importantly, Aaron and his team can now help more people on their road to wellness.
Aspire now owns 100% of the building which allows them to take on business that in the past they had to turn away. The company also anticipates it will create an additional six jobs over the next couple of years.
Broker Kyle Barratt says “The largest advantage for owner/occupiers in utilizing the SBA 504 program is the high loan to value structure offered under this program. Coupled with low and competitive interest rates, Buyer’s who utilize this program are able to leverage as little as a 10% down payment, which allows these small businesses to preserve working capital and pay for other capital items, such as tenant improvements.”
