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Billings Business Uses Economic Recession and 504 Opportunity as a Time to Invest in the Company
While many businesses are shying away from taking out more debt and looking at cutting back or even throwing in the towel, one Montana business sees this time as an opportune time to invest in their business. Bill Kronmiller and Paul Neutgens, partners of American Steel, a steel fabricating business in Billings, took advantage of reduced costs, low interest rates and market position by building a new 26,000 square foot facility.
The new facility offers radiant floor heating, separate painting and production bays, elbow room for their employees and even indoor plumbing- a far cry from their previous location, which didn’t have indoor plumbing. Not only does the facility offer more room to take on bigger projects, but both owners agree providing extra room and space makes for happier employees.
“The employees seem to be happier, because they’re not all cramped up in a small space,” Neutgens said. “They have their own elbow room to get their jobs done and don’t have to worry about crowding into someone else’s area.”
American Steel was able to build the new facility and acquire land because of a Small Business Administration 504 loan for $1.468 million provided by the Big Sky Economic Development Corporation. The SBA 504 loan program provides long-term, fixed rate financing for major fixed assets, such as land and buildings.
“Not only did the 504 loan program allow for funding of the new facility, but it also provided us a better position with our cash flow,” states Kronmiller. “It’s an important part of business to understand your cash flow and make sure you have enough, especially when you are dealing with big projects and government contracts.”
In fact, 85-90% of American Steel’s business comes directly from government contracts or other projects somehow funding by the government. This wasn’t the case a few years back, when their focus was on the private sector, but because of the economy American Steel changed its focus to where the money is, which is in government funded projects.
Kronmiller and Neutgens are optimistic about the future- that’s why they built the new facility in such a ways that further expansion could be done easily by adding on to either side of the structure.
While business is stable, but not overwhelming, for American Steel, Kronmiller and Neutgens take this time to “practice” their skills and perfect what they do. Neutgens has also been taking advantage of SBA’s Emerging Leaders Initiative program to polish his business sense and financial background.