01 Dec 2008
Alan Hoambrecker has never been in the news before. But in times when the latest corporate layoff announcement often is the business news of the day, Hoambrecker stands out for the 30 jobs his small business is preparing to create.
Hoambrecker, a Kansas City food broker serving convenience stores, is preparing to open a convenience store of his own now that he has received approval for the $940,000 SBA 504 loan he applied for through the lending arm of the Economic Development Corp. of Kansas City.
Jeff Kaczmarek, CEO of the EDC, said deal flow through the agency’s redevelopment project pipeline has decreased to 25 percent of its normal rate. In contrast, small business remains a bulwark of the local economy, as evidenced by EDC Loan Corp.’s brisk SBA 504 business, Kaczmarek said.
Doug Nuckolls, executive director of EDC Loan Corp., said his pipeline of SBA 504 loan applications with a strong chance of closing had increased by 50 percent in November. Eight such loans, for projects with a combined value of $14 million, were in the pipeline on Nov. 21, when Hoambrecker learned that the U.S. Small Business Administration had approved his loan.
Nuckolls said the EDC services 32 loans through the SBA 504 Program, which finances long-term assets such as real estate and equipment. Of those loans, only one is 30 days or more past due.“To me, that’s another great indication that our small businesses are alive and well in Kansas City,” Nuckolls said.
To qualify for an SBA 504 loan, a business must have a net worth of $8.5 million or less and annual profits no greater than $3 million. A byproduct of the loan must be job creation or satisfaction of a public policy goal, such as urban redevelopment, and the loan must be matched by 10 percent to 20 percent buyer equity and 50 percent bank financing.
Nuckolls said interest rates for SBA 504 loans have been running about 7.7 percent — a little higher than normal because of the tightening of the credit markets. But he said the 20-year loans come with an attractive feature not generally available to small businesses through traditional long-term lending sources: fixed rates.Hoambrecker said he would use the SBA loan proceeds and financing from Wells Bank of Platte City to build a 6,000-square-foot upscale convenience store near Missouri Highway 45 and Interstate 435 in Parkville.
The site, surrounded by $250,000 to $700,000 homes, including Hoambrecker’s, is more than three miles from the nearest outlets for gasoline, pizza and liquor. So Hoambrecker will feature all of those commodities at his new store, a roughly $3 million project.“Where we live, they don’t even have pizza delivery,” he said. “So I’m going to put in a Stone Canyon Pizza operation.”
Hoambrecker, who founded Spectour Marketing Inc. 14 years ago, is a manufacturer’s representative for about 15 companies and provides products to convenience stores in nine states. Before embarking on the American dream, he worked for Nabisco, now part of Kraft Foods Inc., and Keebler Co.“I have some friends who still worked with Kraft Nabisco,” Hoambrecker said, “and they just got let go.”
The economy has put a 5 percent dent in Spectour Marketing’s sales, but it hasn’t scared Hoambrecker away from his new retail venture.“I live within a mile of this site, and I know there’s a definite need for it,” he said. “I’ve been working on it for four years, so it’s kind of become my baby.”
Source: http://kansascity.bizjournals.com/kansascity/