SBA Helped Cycling Company Control its Costs

SBA Helped Cycling Company Control its Costs

Andrew Motola, owner of Long Island’s Brickwell Cycling and Multisport, said that diving into the 54-degree water of the San Francisco Bay during the Escape from Alcatraz triathlon took his breath away and made his body go numb.

“It’s a leap of faith - there’s that second right after you come out of the water when you can’t breathe, and you have to swim or you’ll drown,” Motola said. “But then you get your breath back, and next you start swimming, and eventually you reach the shore.”

Though Motola described a triathlon, he could have been talking about owning a small business.

In 2007, he purchased a long-established family bike shop in Great Neck after a corporate career. He wanted to work at something he really loved and build a community around engagement in cycling and triathlon. Through the last decade, he’s expanded his business to four stores on Long Island, including one he recently opened at 7 Northern Boulevard in Greenvale.

When his lease expired last spring, Motola found himself in a situation similar to that facing many small business owners on Long Island. You might say it was similar to the moment he had to jump in the water and swim to shore to finish the triathlon. 

“The cost of rent to stay in our old space was just too high. Margins don’t go up in this business, expenses do. The cost of insurance, rent, payroll and utilities—they keep going up,” Motola said. “So to take control of some of these expenses, I started looking to buy my own building.”

Before starting this process, Motola had switched banks after being charged a fee for depositing cash with his old financial institution. Once he found the property on Northern Boulevard, he talked with his banker at Bridgehampton National Bank who suggested he apply for a U.S. Small Business Administration (SBA) 504 loan. Motola said the SBA product was a good fit for him and his business because it only required a 10 percent down payment.

Peter Fehnel, Branch Manager of the Long Island SBA office, highlighted the 504 program's unique value to small businesses looking to acquire real estate. “The SBA 504 loan offers long-term, fixed-rate financing for acquiring or renovating capital assets. Most for-profit businesses are eligible for the program. It’s a two-tiered finance vehicle that generally requires 10 percent down from the business, and then splits the remaining 90 percent between a lender and an SBA-guaranteed Certified Development Corporation (CDC).”

Fehnel said that the split underwriting and ten percent down make the 504 loan a great product for businesses without a huge amount of capital.

Motola used the SBA loan to purchase and design to his own specification the 3200 square-foot space in Greenvale. The SBA loan has also helped him reduce some of his operating cost and take more control of fluctuating expenses.

“You look at the space differently when you own it instead of when you’re just a tenant,” Motola said. “When you rent a space you don’t want to put a lot of money into remodeling it, because you might be out of there in two years. But when you’re going to be in a location for many years to come, you want to make those improvements. You see the space differently then.”

Brickwell’s newest location in Greenvale reflects this transition from tenant to landlord. Motola’s lavished the building with energy efficient lighting that saves on long-term electricity costs. He also said he’s looking into installing solar panels, which would reign in the high cost of electric bills.

Motola also said a community has formed around his shops as the result of sponsoring various clubs and teams including the NYPD Triathlon Team, the Queens Metropolitan HS Tri Team, the Long Island Triathlon Club (LITC), and the Brickwell cycling club.

“A bike equals independence. It’s a lifestyle decision,” Motola said. “Where else can you get something that transports you, offers entertainment and is good for the rider and the environment?”

Company Name: 
Brickwell Cycling and Multisport
Location: 
Long Island