SBA 504 loans are backed by the U.S. Small Business Administration (SBA). Self-Help is SBA-certified to offer these loans, which come with significant advantages to small businesses. Here’s a recent example:
A Self-Help 504 SBA loan helped finance this WorkSmart building in Durham, NC.
In 2001, UNC MBA grad Ron Unger noticed a common need among small businesses: These companies often didn’t have the budget to hire their own IT department, yet still needed IT support. Ron combined forces with two other MBA friends to create WorkSmart, a company providing managed IT services to other businesses. WorkSmart started small and steadily built up a client base as word spread about their excellent customer service and reliable solutions.
By 2010, WorkSmart had maxed out their leased office space. In partnership with their lender, they used an SBA 504 loan from Self-Help to purchase their first building. They didn’t have enough employees to fill the entire building yet, but they wanted to give themselves plenty of room to grow. WorkSmart leased out 49% of the building (the maximum allowable by the SBA) to other businesses and occupied 51% of the building themselves. This smart growth strategy allowed WorkSmart to obtain the space they needed to fuel their growth while still taking advantage of the long-term low down payment and low interest rate offered by the SBA 504 loan.
Since then, WorkSmart has continued to grow year over year, appearing on the INC 5000 list, an annual ranking of the fastest-growing private companies, 11 years in a row. The business now occupies more than 80% of the original building and has purchased an identical building next door along with an office condo in Charlotte. They employ 70 people and have a presence in Durham, Charlotte, Greensboro and Philadelphia.
Many SBA 504 borrowers are businesses that use heavy equipment and require large facilities. But as WorkSmart realized, smaller service-oriented companies can also take advantage of the SBA 504 program’s great terms by leasing out part of their space until they are ready to grow. If you are working with a business that could also benefit from a long-term loan at low fixed rates, contact us today and find out more about the SBA 504 program.