Rigid Industries

With CRE Financing Up 26% in 2012, Rigid Industries Uses Funds for Expansion, Growth

 

Financing of commercial real estate purchases using SBA loans in Arizona was up 26% in calendar 2012 compared to 2011, according to CDC Small Business Finance, a local leader in SBA lending.

For calendar 2012, $176M in financing was approved with 137 SBA-504 loans to help small businesses purchase commercial/industrial buildings. In 2011, $139M was approved through 117 SBA-504 loans.

Chris Bane

Chris Bane

“Small business owners need to realize that commercial real estate inventory is getting scarcer with the help of sustained low interest rates,” says Chris Bane, senior commercial loan officer for CDC Small Business Finance. “People are coming off the sidelines to purchase their own building, grow equity rather than pay rent and stimulate job growth.”

One of these businesses is Rigid Industries, a company developing, manufacturing and distributing LED lighting for a variety of power sports, military, farming and off-road vehicles.

Its recent SBA-504 loan will fund expansion into a second commercial building in Gilbert. Rigid Industries attributes this growth to increased government business and international sales. Approximately 48% of revenues are international with 52% being domestic.

“Acquiring this new facility will increase our operating footprint from 15,000 to more than 60,000 SF, helping us better manage new manufacturing lines, improve our inventory control, as well as more timely distribution of finished products,” explains Jason Christiansen, president of Rigid Industries.

“Over the next five years we expect to see our business grow by almost 40%. In order to sufficiently support this growth, we need to have more space not only for increased inventory and product development, but also for the new people we plan to hire and bring on board.”

Nearly 2,000 jobs are projected to be created in Arizona as a result of SBA-504 financing approved in the last 12 months. CDC Small Business Finance approved 38 SBA-504 loans for more than $58M in financing in 2012.

The 504-loan program was created by the SBA for the specific purpose of financing long-term fixed assets such as commercial real estate and equipment with economic life of 10 years or greater. The current SBA-504 rate is under 5%.

 

 

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