Buying Building Versus Leasing Keeps Biotech Company on Steady Growth Path
As small businesses grow, running out of room can be a challenge, requiring a space reconfiguration or even a move to a larger facility.
Biosero, a San Diego-based software development/laboratory integration company serving the biotech and pharmaceutical industries nationwide, was growing 35% a year and facing a lease expiration when its owners decided to look into buying their own building. They found one in an area where many biotech and biomed companies cluster, but they quickly discovered how expensive conventional bank financing can be.
Enter Jeremy Wilson, a loan officer with Bank Of The West who, on behalf of Biosero, reached out to SBA loan expert Merri Adams of CDC Small Business Finance. She penciled out an affordable financing solution using an SBA 504 loan to cover the $3.7 million building purchase.
The SBA 504 loan was key in terms of our affording this building and key to our development as a company,” said Tom Gilman, Biosero’s CEO. “Capital and cash flow are critical to the operational health of Biosero and we’re grateful to the SBA for its support of the life science community in San Diego.”
Fixed-rate, long-term loan options make the difference
“Without CDC’s SBA 504 loan, our payments would have been too high and we probably wouldn’t have been able to buy the building. The longer term and low down-payment made the difference.”
Director of Operations, Biosero
requires a bank to partner with a certified development company (like CDC Small Business Finance) on 90% of the financing and the small business contributes a 10% down-payment.
Andrea Salazar, director of operations for Biosero, said: “Without CDC’s SBA 504 loan, our payments would have been too high and we probably wouldn’t have been able to buy the building. The longer term and low down-payment made the difference.”
Andrea said her experience with the SBA lending process never tried her patience.
“Yes, we had a few hoops to jump through, but we stayed way ahead of the curve working with CDC’s Merri Adams,” Salazar said. “She walked us through the entire process and it was smooth sailing.”
New facility gives company room to expand and create jobs
Since moving into its spacious, attractive headquarters building – three times the size of the former facility – Biosero hasn’t missed a beat, continuing to serve its 120 customers and projecting to create 20 new jobs over the next two years.
Biosero was founded by Gilman in Los Angeles in 2003. He moved the company to San Diego in 2012 to be closer to the biotech/pharmaceutical concentration of companies. Biosero is a premiere developer of software that automates laboratory workflows required by powerhouse pharma companies like Merck and Eli Lilly.
Dave Dambman, director of engineering for Biosero, described the company’s niche: “Our core focus is software that can communicate the intent of scientists to robotics which do the work and provide data back to scientists so they can accelerate their progress on the path of discovery.”
In purchasing a building, Biosero’s owners will stabilize their occupancy costs and year after year be investing in their own retirement. Adams said she frequently gets calls from small businesses who got a SBA 504 loan five years ago, have outgrown the building they bought and need new financing for a larger building.
“It’s very rewarding to help businesses grow and save for their retirement. Buying a building is one of the best retirement tools owners can create for themselves,” said Adams.
Success puts company in spotlight
Biosero’s success recently grabbed the interest of Congressman Scott Peters who took a tour of the new building and got a demonstration of the company’s capabilities. Check out the tour (Biosero is second up). Peters’ attention was more icing on the cake for Gilman, who confided that the most satisfying thing about leading Biosero is working with his employees and customers.
“We’re like a talented family, where our personal beliefs and our company mission are aligned,” he said. “And with our customers, we’re blessed to work with some of the brightest minds in the world dedicated to curing illnesses.”
Providing exceptional customer service was the original spark that motivated Gilman to start Biosero. He knew he could take care of his clients better than anyone else. Plus he had a solid foundation of success in sales and applications management, all of which convinced him to launch his own company.
Tips from a risk-averse entrepreneur
”Surround yourself with talented people, then get out of their way.”
Although Gilman admits to being an entrepreneur of sorts, but not in the classic sense of the label.
“People often equate ‘entrepreneur’ with being a risk-taker; that’s not me,” he said. “I clearly think through all the aspects of running the business: operations, finance, teams, vision. Biosero is 15 years old, completely privately held, enjoying exceptional growth. It works for us.”
Over the last decade, Gilman has learned some good lessons that he’ll impart if asked. He shares: “Always surround yourself with talented people and then get out of their way. Believe in yourself and your vision. And, prepare for success, not failure.”
In case you missed it, here are a couple other inspiring stories of small business growth:
How a Military Vet Used Drone Technology to Launch Niche Business with SBA Loan
How Free Business Coaching with SBA Loan Paved Way for San Diego Pizza Maker’s Growth