Buying Warehouse Helped Boost Business and Double Hiring
If you’ve ever been inside a college bookstore and touched school swag in plush-toy form, then you’ve likely experienced a Mascot Factory product.
The Mascot Factory was founded in 1999 by Dee Mazza, who remains the creative force behind the company’s unique and detailed designs. Benjamin Lee joined as a partner in 2005, and together, they have grown the company into the leader in the markets they serve. Lee’s wife, Sandra Oh, joined in 2010; she runs the operations side of the business.
As their need for more space grew, the Mascot Factory figured it was time to find a long-term property for their business.
That’s when they realized an SBA 504 loan — affordable, fixed-rate financing for commercial buildings and major equipment — “was the next step in our business,” Oh said.
“It seemed logical to own property especially when you’re continuing to grow,” Oh added.
Searching for a business venture
When Lee and Oh met as students at UC Berkeley in the early 1990s, they never thought they’d end up buying a company together let alone becoming day-to-day business partners.
After graduation, they went off to work for high-tech firms in Northern California. Lee later took a detour at London Business School. Thereafter, the couple relocated to Los Angeles and then Orlando to be closer with family.
By 2006, Lee realized he wanted to buy, operate and nurture his own venture.
“Coming out of business school, I thought I’d go into investment banking, but I hated wearing a suit and tie,” Lee said. “I’ve also wanted to do something on my own.”
After reviewing roughly 80 existing businesses, he found through a business broker the Mascot Factory. He admired the company’s strong cash flow, great relationships and growth prospects. Lee also liked the strong foundation that Mazza had created and decided to join the company. In 2010, Oh left Accenture to join Mascot Factory as the head of operations. And about five years ago, they relocated the company to Southern California.
Needing more warehouse space
Half of their business involves “dressing” already-made plush toys. By Mascot’s entrance, employees press logos and messages onto tiny shirts that will outfit “naked” toys, from bulldogs to bears. They produce plush animals for collegiate clients and professional teams including the Lakers and Celtics. The huggable plushes are then shipped and sold at college bookstores and arenas around the nation.
The other half of the business centers on custom orders. Clients call in orders, and designs are made and prototyped. An office in China, which they own, makes the goods and ships the finished products back to Mascot Factory’s headquarters.
With the growth and increasing inventory, they needed enough warehouse space to house it. This is why real estate plays such an essential role in the couple’s business.
“As our business grew, we had a growing need for more office and warehouse space, as well as finding new ways to be more prudent with our finances,” Lee said.
Even with their growth, the Mascot Factory has retained a family environment, where people enjoy coming to work and each other’s company, Lee said. In fact, Mazza’s two sisters, Debbie and Patty, run the inside sales and customer service teams.
The 504 loan process: ‘It was very painless’
Through a Chase bank referral, the couple ended up working with Mike Sarthou, an SBA 504 loan expert at CDC Small Business Finance. CDC is a leading small business lender in the country and a nonprofit. With three decades of experience, Sarthou worked closely with the Mascot Factory to close the deal with no hiccups.
A 504 loan offers business owners several benefits, from a 10 percent down payment to a fixed rate with no outside collateral required. Funding amounts can go up to $20 million.
“It was very painless,” said Oh, of the 504 approval process. “We had heard horror stories…But Mike explained everything step by step. We were shocked at how quick it went and it was smoother than our bank loan.”
In addition to securing real estate for the company’s future growth, the couple is also minimizing their tax bills through the ownership of their building. Costs associated with owning a commercial property can provide tax benefits in the form of mortgage interest and property tax write-offs.
Since buying their building, Mascot Factory has doubled the size of their team to 22. And they are looking to double it again shortly, Lee said.
“2018 is forecasting to be another exciting year,” he added.
Jobs created/preserved: 11
CDC Small Business Finance offers several loan options for business owners who want to grow their operations and are planning for their long-term needs.
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