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AGC Succeeds with SBA
By Mark D. Gibson
U.S. Small Business Administration
Georgia District Public Affairs
Drive and determination are not only key contributing factors to being successful in the military, they are essential to the success of AGC Training Center, in Augusta, Georgia. Bobbie and Herman Lee, military veteran husband and wife team, understand what it means to serve. As veterans, they developed leadership skills to encourage and empower their clients and customers to excel while keeping a sense of serving the community as their priority. AGC provides services to licensed childcare programs for children from birth to age twelve, elementary schools, and registered family childcare programs in a four state region. Bobbie and Herman teamed with their local SBA Small Business Development Center (SBDC) to get where they are today.
"The SBA has been instrumental in keeping my team and me abreast to what's going on in the world as it relates to small business. The SBA is our go to source for factual, relevant, and current information on growing your small business, doing business with the government, certifications, and a lot more." Said Bobbi. "Initially, we met with Susan Caldwell, Area Director, SBDC to discuss our needs and plans and she referred us to her colleague Jonathan Bohn. Once Jonathan came on board he was instrumental in helping us prioritize what AGC's strategy was going to be going forward. With his help we were able to complete a business plan in less than five months."
The SBDCs mission is to build, sustain, and promote small business development and enhance local economies by creating businesses and jobs. The SBDC program, vital to the SBA’s entrepreneurial outreach, has been providing service to small businesses for more than 30 years. It is one of the largest professional small business management and technical assistance networks in the nation. With more than 900 locations across the country, SBDCs offer free one-on-one expert business advice and low-cost training by qualified small business professionals to existing and future entrepreneurs.
Bobbie Lee (AGC Owner), Susan Caldwell (SBDC), David Perry, & Terri Denison (SBA).
Photo by: Mark D. Gibson
"Seeing the Lees’ achieve success is not a surprise. From our initial conversation, it was apparent Bobbie and Herman were serious about their business and knew it well, but also not hesitant to seek assistance when treading in unfamiliar waters. When the Lees first came to the SBDC, they planned to purchase an existing school supplies business. After working with the SBDC and conducting their due diligence, they chose, instead, to start their own retail store from scratch. Although starting from scratch was a risky strategy, the center’s success is evidence the Lees made a wise choice.
After several failed attempts to find a suitable retail location, the Lees identified and secured a prime location, purchased fixtures from two closing Blockbusters, and were ready to start purchasing inventory and hiring two new employees. In January 2012, AGC acquired the necessary funding to expand operations through Queensboro Bank, an SBA preferred lender, through the 7(a) program.
The 7(a) Loan Program is SBA’s primary program to help start-up and existing small businesses obtain financing when they might not be eligible for business loans through normal lending channels. The name comes from section 7(a) of the Small Business Act, which authorizes SBA to provide business loans to American small businesses. SBA itself does not make loans, but rather guarantees a portion of loans made and administered by commercial lending institutions.
7(a) loans are the most basic and most commonly used type of loans. They are also the most flexible, since financing can be guaranteed for a variety of general business purposes, including working capital, machinery and equipment, furniture and fixtures, land and building (including purchase, renovation and new construction), leasehold improvements, and debt refinancing (under special conditions). Loan maturity is up to 10 years for working capital and generally up to 25 years for fixed assets.
Most banks participate in the program, as do some non-bank lenders, which expands the availability of loans. Participating lenders agree to structure loans according to SBA's requirements, and apply and receive a guaranty from SBA on a portion of this loan. The SBA does not fully guarantee 7(a) loans—the lender and SBA share the risk that a borrower will not be able to repay the loan in full. The guaranty is against payment default; it does not cover imprudent decisions by the lender or misrepresentation by the borrower.
Team Lee recognized several opportunities for growth, including that of selling educational products to its clients. As AGC achieved success in its goal to train and provide consulting services to educators, the Lees recognized the opportunity to expand the business. Based on market research, they realized parents and educators alike were looking for a one-stop-shop to receive training, buy school supplies and have resources available to them, all in one location. The Lees’ goal was for AGC to become like a "Barnes and Noble" for teachers and parents as well.
Augusta building supply reaches for stars with SBA
By Mark D. Gibson
U.S. Small Business Administration
Georgia District Public Affairs
The 50 stars on the flag represent more than just the 50 States of the United States of America. The star also represents a standard of excellence that transcends to Star One Supplies located in Augusta, Georgia. Rufus Burdette, Star One’s owner, is no stranger to living a life of standards dedicated to excellence as a retired Army Sergeant Major with over 28 years of honorable service. "Star One signifies the level of dedication our company has to the community, our customers and a constant reminder of the spirit of entrepreneurism." Said Morgan Burdette, Rufus’ son & General Manager Star One Supplies.
As co-owner of Greene & Burdette Property management in Waynesboro Georgia, Rufus quickly recognized challenges and shortfalls surrounding the procurement of supplies for the business, and the idea of Star One Supplies to meet those challenges was born.
During the 2009 economic downturn, when many construction and building and supply companies were struggling, Rufus opened the only minority-owned building supply store in the Central Savannah River Area (CSRA). By July 2010, Star One Supplies had outgrown its leased space and plans were quickly underway to construct their own building.
During the initial planning phase for his business Rufus sought out assistance within the business community at the Small Business Development Center (SBDC), 1450 Greene St, Augusta, GA 30901. The SBDCs provide a wide array of technical assistance to small businesses and aspiring entrepreneurs supporting business performance and sustainability and enhancing the creation of new businesses entities. These small businesses in turn foster local and regional economic development through job creation and retention as a result of the extensive one-on-one long-term counseling, training and specialized services they receive from the SBDCs. The SBDCs are made up of a unique collaboration of SBA, state and local governments, and private sector funding resources.
SBDCs provide services such as development of business plans, manufacturing assistance, financial packages, and procurement contracts. Based on client needs and local business trends and individual business requirements, SBDCs modify their services to meet the evolving needs of the small business community in which they are situated.
Susan Caldwell, SBDC Area Director, recalls "early on in our work together, I complimented Rufus on his business success, noting some of the challenges I knew he had faced along the way. Rufus modestly commented that he never allowed hurdles to become obstacles or excuses for not moving forward and reaching his goal. The steadfastness Rufus displayed as we worked together to develop his business plan and pro forma paid off when he received an SBA 504 loan and was able to construct Star One’s new building in its current location. In my opinion, Rufus sets an excellent example for small business owners by demonstrating what is possible with dedication and hard work."
Rufus Burdette, Susan Caldwell, SBDC & Terri Denison, SBA
Photo by: Mark D. Gibson
"I understand what it means to have the right tools to build a building or complete a project that is why I went to the SBA. If you are willing to put in the work and effort the SBDC and SBA offer free services to help you. I was able to secure the necessary capital through the 504 loan program to construct my new building," said Burdette.
The 504 loan program is a long-term financing tool for economic development within a community. The 504 Program provides small businesses requiring "brick and mortar" financing with long-term, fixed-rate financing to acquire major fixed assets for expansion or modernization. A Certified Development Company (CDC) is a private, nonprofit corporation set up to contribute to the economic development of its community. CDCs work with SBA and private sector lenders to provide financing to small businesses.
"Being in a military community like Augusta with Fort Gordon and the Army Signal Center, we have a number of military veterans who choose to stay in Augusta after retirement from active duty. Star One was unique. Sergeant Major Burdette had a vibrant contracting business before his retirement and his ability to have his own building supply store was a natural complement to that. The location in South Augusta will not only support his business, but the contractors and industries near Star One who prior to this had a lengthy drive to get even basic supplies. He has a unique niche business by location and by the fact he can now not only supply his company at discounted prices, but other contractors. We are grateful Queensborough National Bank and Trust, one of our best lending partners, introduced us to Sergeant Major Burdette." Randy Griffin, President, CSRA Business Lending, Augusta, Georgia.
Today, Star One’s operations are conducted in a 12,000 sq. ft. building that provides Augusta and surrounding communities with a one-stop shopping experience for its professional contractors customer base by offering a variety of products from raw materials, hardware, flooring, and office supplies. Star One Supplies offers everything necessary with a competitive edge for new construction, remodeling, or the do it yourself projects.
Advanced Metal Components Uses SBA 7(a) Loan To Cut Its Debt Costs, and Save Rural Georgia Jobs
When the recession hit Advanced Metal Components (AMC) Inc. three years ago, the company and its 130 employees in Swainsboro had a backlog of work to carry them forward for another 12 months or better.
However, Doug Brown, who took over the family-owned business in 1999, realized he would soon need new financing for fresh working capital, and to take the business to a new level of production to handle orders after the economy started to improve.
Brown, a graduate of Georgia Tech with a passion for engineering, would turn to Spivey State Bank in Swainsboro for an SBA guaranteed loan of $3.2 million. This loan, under the SBA’s 7(a) program, closed in March, 2011. It allowed Brown’s company to cut its debt service on several existing bank loans by half, thereby freeing up vital cash flow while providing $250,000 in new working capital to help weather the recession. At the same time, the loan saved dozens of good-paying jobs in rural Emanuel County, Georgia.
The Spivey Bank loan was also used to purchase a $500,000 computer controlled hydraulic, punch press machine with an automatic loan and unload system. “This machine drops the time it takes to cut each job by about 30 percent with its automatic load and unload feature,” said Brown. “Last year, we didn’t have the punching capacity to stay up with demand.”
When his parents started the business with two employees in 1977, the late Richard Brown and his wife Regina had very little fabrication equipment, basically a couple of old mechanical punch presses, a metal shear and a surface grinder.
But by 1981, the Browns were embarking on a major expansion of the company, adding state-of-the-art fabricating equipment with additional investments in training skilled operators. The company moved into a new 60,000 square foot industrial building in 1989 after at least four separate production improvements during that decade.
The company’s path of expansion would continue under their son, Doug Brown, who became AMC president in 2003. By this time, the company had grown into a much larger 127,000 square foot facility.
After he joined the company, Doug Brown would serve as Vice President of Sales and Engineering, helping to diversify and increased company sales. Later he became Vice President of Operations, managing personnel and the entire plant. After proving his management abilities, Brown bought out his mother’s interest in the company. His father, a well-respected businessman and community leader, unfortunately died in 1995 as a result of a plane crash.
Brown directs the company’s operations with the help of Danny Palmer, Director of Manufacturing.
Brown says the year 2009 and the first half of 2010 were very difficult for the company. By March of 2009, AMC employment had dropped to only 83 workers. But following Brown’s SBA-backed loan, employment and business have started to pick up substantially.
“Our loan was critical,” says Brown now with 150 employees. “It allowed us to keep going and add employees to gain new business.”
“Since January of 2011, our sales have shown a steady increase,” he continued. “Last August was a 56 percent increase over January of 2011 which was our best year ever.”
Brown credits Ryan Waldrop, a staff person with the Georgia Department of Economic Development, with steering him to a 7(a) bank loan as the best way to refinance his business. And since the loan was approved under the American Recovery and Investment Act, Brown was able to save over $100,000 in loan fees that were waived under the act. The Small Business Assistance Corporation, an SBA Certified Development Company in Savannah, packaged the AMC loan for Spivey Bank.
As a precision sheet metal fabricator, AMC offers contract manufacturing services to businesses in the industrial equipment, medical, refrigeration, mass transit, and telecommunications industries.
Doug Brown, President
Advanced Metal Components Inc.
720 Empire Expressway
Swainsboro, GA 30401
478/237-8994
