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SBA and a Biochemist Develop a Formula for Success
Praful Patel, Ph.D, President and CEO of National Biochemicals Corp. is a true American success story. With hard work, intelligence, and skill – as well as SBA loan programs -- he has built a thriving business. Originally from India, Dr. Patel immigrated to the United States in 1987. At first he worked for other people, consulting for biochemical and diagnostic companies, but in 1992 he made the decision to create a business of his own. His start was very modest – he opened National Biochemicals in his garage. “My first order was for 25 kilograms of product,” Dr. Patel recalls, “I didn’t even have a scale to weigh it on.” Today, National Biochemicals manufactures and supplies raw materials to the life science industry. Its clients include biopharmaceutical companies, wholesale distributors, and other providers of high purity biochemical based products. The company’s customers also include teaching institutions, and it is even involved in catching criminals through DNA fingerprinting components.
While National Biochemicals’ sales have increased year after year, its path to success has not been without challenges. Along the way SBA has been there to help. For example, in 1996 Dr. Patel received an Express Loan through Key Bank for $100,000 which enabled him to move into needed new markets, positioning the company to grow. This measured expansion is characteristic of National Biochemicals, noted Julie Ann Sweet, Key Bank SBA Sales Manager for northeast Ohio, “He has grown the business each year by new product development, opening of new markets to sell to and providing a superior product and process to ensure a top of the line product for the end user.”
Later in the company’s development Dr. Patel faced additional obstacles. National Biochemicals needed to expand into greater physical space to ensure it met the exacting production standards of its clients, the FDA and other authorities. Strict controls on incoming and outgoing product, research and development laboratory space, and clean rooms -- which in some cases exceed the standard in hospital operating rooms -- must be maintained. To meet these requirements, Dr. Patel turned to the SBA’s 504 Program. SBA 504 loans are specifically designed for the purchase of land, including existing buildings, and the purchase of capital improvements.
The SBA 504 loan program allowed Dr. Patel to purchase a facility in 2006, through Key Bank and Growth Capital Corporation. Using the program again in 2008, he also acquired a building via Key Bank and Cascade Capital Corporation. In addition, in 2012 Dr. Patel benefited from another 504 loan, which has made possible a 50,000 sq ft addition to one of the buildings. “Without the loans, in particular those of 2008 and 2012, said Dr. Patel, “we would have had to pick and choose customers.” Now Dr. Patel is planning to export, expanding again into new markets that hold great promise.
However much Dr. Patel’s technical and business savvy benefits National Biochemicals, he ultimately passes his success on to his employees. He has invested in 40 highly paid scientific and technical workers who enrich their local economy. Key to their good jobs has been the vital role of SBA loan programs in the company’s robust history and future.
Because Dr. Patel has made an outstanding contribution to the economy through his business acumen, innovation, and response to adversity, he was honored as the 2014 SBA Cleveland District Small Business Person of the Year.