Convenience Store Financing
Made Simple with SBA

HND, Inc. Detroit, Michigan

Challenge:

In 2006, the owner of HND, Inc. decided to conduct a renovation and expansion project on his property. His goal was to upgrade the existing store and expand the building, making room for a second unit that would house a coin-operated laundromat. These renovations would help increase revenue and add to the services he provided to his community. Not long after the project was completed, the owner looked to renew his first position mortgage. Despite the increased market value and revenue he had achieved through the renovations, his local bank was no longer willing to offer him financing. The borrower thus needed to find a lender that had both the capital to lend in a difficult market and the expertise needed to close the loan before his current mortgage ballooned.

Solution:

The borrower reached out to other business owners in his community and was referred to Ocean Capital, the commercial lending division of Home Loan Investment Bank. Having financed numerous convenience stores through the SBA 7(a) program, the Bank has extensive experience in originating, packaging and closing SBA loans catering to the convenience store industry. In cooperation with the Michigan Small Business Administration office, Ocean Capital crafted a long term financing solution for the existing debt that was on the verge of ballooning, and in the process enabled the borrower to free up the equity in his property to be used to consolidate the debt accumulated during the recent renovation project.

Results:

On May 29th, 2009, the borrower closed on an SBA 7(a) loan for $337,500. He was able to close well within the time frame required by the upcoming balloon payment. The property renovations and new laundry facility resulted in a ‘win-win’ for both the community and the borrower’s business. The financing helped pay for a much needed laundry facility for the local community while also enabling the owners of HND, Inc. to maximize their property‘s profit potential.