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Country Tire on its way back to business thanks to SBA Disaster Loan help

Country Tire has been a treasured part of the small town community in eastern Nebraska and western Iowa for more than 25 years, from a friend to farmers needing fast service in their fields to moms looking for a new set of radials for the family car.  But after a summer of Missouri River flooding followed by a year of brutal drought, this family-owned company teetered on the brink of ruin.

The punishing climate extracted a toll on Country Tire and its four locations; with 65 percent of its business from the agriculture industry, said general manager/vice-president Eric Howland from his office in the company’s shop in Blair, "we lost $1.5 million in sales just in the fourth quarter of 2012."

Howland explained: "For example, when you don't have crops, you don't need to be in the field to harvest them. When you have corn stocks that brittle from no rain, there's no chance of tire damage.  So our calls to head out to fix flats were down 50 percent. Plus, a lot of farmers didn't have the income to buy tires, so they just wouldn't replace them like they normally would."

Normally, farmers do buy a lot of tires.  Howland said there's maybe 300 tires a single customer could own, from a production tractor, to a chore tractor, combine, and semi-truck, not to mention their own personal vehicles.  While eventually all of those would need to be replaced, the trend was for farmers to hold on to their tires so much it actually caused a shortage in the area's used tire market.

Things went from bad to worse when as a result of its dwindling financial prospects their bank called in its loan. Country Tire now had no line of credit to finance inventory crucial to servicing the customers they still had, and began to run a past due balance with its Bridgestone/Firestone vendor.

"No bank would touch us," Howland said with a shake of his head.  He now faced the grim prospect of closing the doors and laying off its 30 employees.

"These were good jobs, too, paying $14-15 an hour," said Howland.  Solid middle class wages that benefit a small town's economy. 

But a banker friend mentioned a program to Howland that could help him stave off the worst.

The SBA's Economic Injury Disaster Loan offers small businesses working capital to help meet its obligations and to pay ordinary and necessary operating expenses if they're unable to get credit elsewhere, keeping the doors open until normal operations resume after a disaster.

Perfect, thought Howland.  And any other time, it might have been--but that's when Super Storm Sandy struck the East Coast, causing not only untold billions in damage, but an unexpected spike in requests for disaster loan help from the SBA.

Finally, in April 2013, a loan for $707,000 came through. Howland used the proceeds to pay off the remainder of the line of credit that had been called in, then used the bulk to pay down a large part of its past due account with Bridgestone/Firestone.

"If we hadn't gotten the loan," Howland said, candidly, "we would be closed."

The business is still in a tough situation, he added.  Sales are still flat as the area economy continues to recover from the twin disasters, but profits are up as the company has found expenses on the books to cut.

“During the downturn,” Howland said, just a little proudly, “we lost no employees. I think we've now gotten to the point where we're stable. This business has been through so much and we're still standing.  I'm always optimistic.”

And so are the banks; in fact, the business currently is working on an application for another SBA guaranteed line of credit to build back up the company's inventory.

Since Howland’s father, Roger, started the business in 1985, with services in Blair, and Atlantic, Glenwood and Shenandoah, Iowa, Country Tire has turned to SBA financing every few years or so. In 1993, they business was approved for a 7(a) loan, and in 2003, the firm worked with the Nebraska Economic Development Corporation on a 504 deal which expanded the operation in Blair from two cramped bays to five spacious ones, and added a large warehouse to accommodate expanded inventory capacity.  As a result, monthly revenues shot from an average of $50,000 to $60,000 a month to $100,000.

Howland will tell you the competition in the tire business for customers is fierce from more than a dozen auto and truck dealerships and retail stores in the area; since it’s difficult to compete on price, Country Tire has turned to listing on sites such as, a web site which lists businesses which have taken significant steps to address concerns of their female customers, and offers companies helpful tips to attract and keep them, and takes its customer service obligations seriously.

“We want you to feel comfortable, knowing that you are dealing with trained professionals at all of our locations,” Howland said.  “We take an attitude that we're glad you're here and you're not a customer, you're part of the family.”

Howland also has a passion for the products the family-owned business sells.

Yes, the company offers a solid line of products: farm tires with reduced soil compaction and solid traction for tractor, skid steer, gator or rubber tracks; alloy wheels which help dissipate heat while braking in stop-and-go traffic; and, trendy plus-size rims.

But you know they simply love what they do when you visit the unique tire “museum” the family displays in the basement of their Blair location, with Firestone artifacts dating from the turn of the last century, including tires produced for the military by the company during World War II.  In a display case is a picture of the elder Howland posing with a number of other Bridgestone/Firestone dealer representatives in the winner’s circle at the Indianapolis 500.

“You know, I went to school in Blair,” Howland said.  “My dad is in the Lions Club, and he’s been a staple in the community for years.” Each year, the business gives to the American Cancer Society’s Relay for Life, helps send kids with multiple sclerosis to camp, sponsor a Little League team in Glenwood and offered $2,000 to help upgrade the baseball park in Blair, and give scholarships to high school students in the Future Farmers of America program.

And Country Tire will continue to around to give back, thanks in a small part to the SBA loan program.

“This is my generation,” Howland said.  “You hear horror stories that a family business fails when the next generation takes over. I didn't want that to happen.”