SBA 504 SUCCESS STORIES


Frontline Industries

Pumped Up Over His Success; NJ Manufacturer Expands with $3.3 Million SBA Loan

IRVINGTON, NJ---Alfredo Ciotola has good reason to be pumped up these days. Despite a sluggish economy, the owner of Frontline Industries, an Irvington manufacturer is doing just fine selling and repairing pumps and seals to his customers.

For Ciotola it all started in 1970, when he emigrated from Italy to the United States. For 10 years he worked for Con Edison in different jobs while studying Mechanical Engineering at nights at the City College of New York.

In 1980, an opportunity came along to buy a valve repair shop in Roselle. So Ciotola and a partner purchased the business. “It was a valve repair shop with very few customers left,” said Ciotola. “We basically purchased the equipment.”

So Ciotola and his partner moved the business to Irvington and quickly began offering repairs of pumps and mechanical seals in order to attract more customers. The strategy paid off and the business began to grow. After he bought out his partner, the company evolved into a firm that provides custom engineered mechanical solutions to companies using industrial equipment.

The turning point for the company came in 1999, when Ciotola received three patents on the Big Boy® Line of Couplings he designed. “On our repair calls I observed the poor quality of couplings that were on the market,” said Ciotola. “I felt compelled to develop something that was superior. Basically, the coupling connects the motor to a pump which allows a machine to function properly. A superior coupling means that our customers get maximum production from their machines and in the long run less maintenance costs.”

The development of the Big Boy® Line of Couplings enabled Ciotola to take his company to the next level. What he didn’t count on was running out of space at his 11,000 square foot facility in Irvington.

Needing a new facility to keep up with the company’s growth, Ciotola found a 27,000 square foot facility also in Irvington. During that time, he also learned of the Regional Business Assistance Corporation (RBAC) in Mercerville. RBAC is a non-profit community wide loan program that provides financing to both new and existing small businesses in New Jersey. The organization also partners with U.S. Small Business Administration (SBA) in the agency’s MicroLoan and 504 Certified Development Company (CDC) loan program.

What interested Ciotola the most was the SBA’s 504 CDC loan program. Typically, a 504 project includes: a third party loan secured with a senior lien on the financed asset from a private-sector lender covering 50 percent of the project cost; a 504 loan secured with a junior lien made by a CDC (funded by a 100 percent SBA- guaranteed debenture) covering up to 40 percent of the project cost; and a contribution of at least 10 percent equity from the borrower. Generally, a business must create or retain one job for every $50,000 provided by SBA, except for manufacturing loans, which must create or retain one job for every $100,000 provided by SBA.

“The purpose behind SBA’s 504 loan program is to provide small businesses like Frontline Industries with long-term financing at a fixed rate for major fixed assets such as land, buildings and equipment,” said SBA’s New Jersey District Director James A. Kocsi. “Partnerships with community lenders like the Regional Business Assistance Corporation and Bank of America give small business owners access to the type of capital that is necessary to generate substantial economic and job growth throughout the United States. The great part of this story is that Frontline Industries remains in the inner city of Irvington where good paying jobs are most needed.”

As a result of utilizing SBA’s 504 loan program, Ciotola was able to secure a $3.3 million to purchase a 27,000 square foot facility in Irvington. The new space allows the company to plan for future growth.

“We were overcrowded at the old facility and the purchase of this new building will make us more productive and will allow us to gradually expand over time,” said Ciotola. “Without the assistance from the SBA, Regional Business Assistance Corporation and Bank of America there is no way that we could have financed this project on our own.”

Today, Frontline Industries employs 17 people with a staff that includes engineers, highly qualified technicians, and trained machinists. The company provides a wide array of products and services to customers in the following industries: Municipalities (Potable & Waste Water), Utilities, Marine, Industrial, Chemical, Petro Chemical, Food & Beverage, Pharmaceuticals, Power Plants in general and Universities’ R&D Departments.

The company offers its customers a pick-up service and delivery within a 100 mile radius. However, the company does allow for out of state customers to ship equipment that need repairs to their Irvington facility. In addition to its repair service, Frontline Industries has distributors in over 25 states, including the District of Columbia and Puerto Rico, as well as international distribution networks in Canada, Argentina, Colombia and Ecuador.

According to Ciotola, Frontline works on all types of pumps and has done work for Key Span, PSE&G, Reliant Energy, Coca Cola and Anheuser Busch to name a few. “The good thing is the economy does not affect us,” “We are either servicing pumps or selling new ones,” said Ciotola. “We are very busy now.”

“Frontline Industries is about implementing specific solutions for very tough problems,” said Ciotola. “There is no competition at the level of quality and service that we provide our customers.”

And for Alfredo Ciotola that is enough to keep him and his employees pumped up about the success they are currently enjoying.



$2.8 Million SBA Loan Helps Gymnastics School into New Facility



HAMILTON, NJ---Valdi Kolasa is flipping over his success. You may even see him doing cartwheels, handstands, forward somersaults, and fly aways in his new 25,000 square foot state-of-the-art gymnastics training facility in Hamilton. Kolasa and his wife, Ann, are the owners of Gymland, an instructional and training facility he started for gymnasts in 1995.

It all started 20 years ago, when Kolasa came to the United States from Poland with only $200 in his pocket and a gymnastics scholarship to Northern Illinois University. “I was competing in Germany and an assistant coach from Northern Illinois University, who was completing his PhD, spotted me,” said Kolasa. “He offered me a gymnastics scholarship as a transfer student. It was difficult decision to leave my family, but I thought it was a great opportunity to come to America.”

So the journey began for Kolasa. He competed for one year at Northern Illinois University, but in his senior year the school decided to drop the men’s gymnastics program. During his senior year he worked cleaning floors at the university and was able to save some money and finish his senior year. He graduated with a degree in physical education.

“I tried to take advantage of the opportunity,” said Kolasa. “The question is what do you do with the opportunity that you are given?” For Kolasa, the answer was easy. Upon graduating from Northern Illinois University, he put his résumé together and looked for a job where he could use his gymnastics skills.

“I still had the passion for gymnastics and was able to land a job as an instructor at a South Jersey club,” said Kolasa. “Eventually, I landed in Princeton and worked for someone who had a school there.”

And then opportunity knocked. The Princeton school where Kolasa was providing instruction had closed. “My dream was to open my own facility,” said Kolasa. “The seeds were already there for me to open my own business. I had even drafted a business plan, before the school closed.” He had saved a good amount of money, but not enough to open his own facility. So he approached the parents of many of his students and asked them if they would be willing to invest in his business. The answer was a resounding yes and in 1995 Gymland was launched in Princeton.

He worked hard to build the business and because of his knowledge, skills and love of gymnastics, he developed a loyal following. Over the last 14 years, he has coached numerous individual and team champions.

But then came the time when Kolasa knew he was ready to bring his business to the next level. Kolasa’s vision was to make his next facility bigger, brighter and better. In order to do that he needed access to capital. He found the perfect spot in Hamilton, an old hockey rink that was up for sale that needed major renovations. So he turned to the Regional Business Assistance Corporation (RBAC) in Mercerville. RBAC is a non-profit community wide loan program that provides financing to both new and existing small businesses in New Jersey. The organization also partners with the U.S. Small Business Administration (SBA) in the agency’s MicroLoan and 504 Certified Development Company (CDC) loan program.

Through RBAC, Kolasa was able to secure a $2.8 million SBA 504 loan to purchase and renovate Gymland’s new facility. Typically, a 504 project includes: a third party loan secured with a senior lien on the financed asset from a private-sector lender covering 50 percent of the project cost. In this instance, 3rd Federal Bank provided a $2 million loan for the project. An SBA 504 loan secured with a junior lien made by RBAC (funded by a 100 percent SBA guaranteed debenture) covered $820,000 or 40 percent of the project cost; and a contribution of 10 percent equity from the Kolasas.

“The purpose behind SBA’s 504 loan program is to provide small businesses like Gymland with long-term financing at a fixed rate for major fixed assets such as land, buildings and equipment,” said SBA’s New Jersey District Director James A. Kocsi. “Partnerships with community lenders like the Regional Business Assistance Corporation and 3rd Federal Bank give small business owners access to the type of capital that is necessary to generate substantial economic and job growth throughout the United States. The great part of this story is that, even in these tough economic times, the Kolasas now have a state-of the-art gymnastics facility that they can call their own.”

In addition to the SBA 504 loan, RBAC provided Gymland with $125,000 loan from the Mercer County Loan fund and another $25,000 from the SBA’s Microloan program to purchase new equipment.

“We went from leasing a 10,000 square foot facility to owning our own 25,000 square foot state-of-the-art building,” said Kolasa. Today, Gymland offers gymnastics programs in a safe, structured professional and fun environment. “We start from 18 months old and go all the way up to instructing adults,” said Ann. “We have parent/child & pre-school classes of 45 minutes for 18 months to 3 years called Land of the Little’s. For children of the ages of 3-5 we have a 60 minute class called Land of the Rollers and for children of the ages of 4-6 we have a 60 minute class we have land of the jumpers.”

Gymland also has a recreational program for children ages 6-18. “There is something here for everyone,” said Kolasa. “Whether the program is competitive or recreational, students learn the necessary skills to perform gymnastics in a fun and inviting environment.”

“I think our equipment is really what sets us apart,” said Ann. “We have all Olympic apparatus that includes balance beams, wood and fiberglass floors, vaults, pommel horse, uneven parallel bars, parallel bars, rings and the high bar. We also have three in ground trampolines and three separate tumbling areas where students dismount into a loose foam pit.”

“We also believe that we have the best staff in the country,” said Kolasa. “Our staff is safety-certified members of the USA Gymnastics and has over 100 years of gymnastics knowledge.”

This year, because of the new space, Gymland offered its students a summer camp. Gymland is also offering gymnastics birthday parties to its customers. In the future, Kolasa would like to provide a fitness room for parents, so they can drop their children off for gymnastics lessons, while they go off and work with a personal trainer or take a fitness class. Other visions include bringing in bleachers so that USA Gymnastics sanctioned tournaments can be held at the new facility.

“The possibilities are endless,” said Kolasa. “We have accomplished so much over the last 14 years. Many of our students have received gymnastic scholarships from major universities. With the new facility we hope to continue this trend.”

Already, Gymland has added two new jobs and hope to hire additional employees as the business continues to grow.

As for their success, people in the gymnastics circles would probably say that Valdi and Ann Kolasa have nailed it.

SBA Micro loan and MCLF Success Stories

For three Guatemalan immigrants, financing from RBAC has helped make their entrepreneurial dreams a reality. Victor Villegas, Juan Carlos Camey and Rosa Cruz, all came to this country with hopes of starting their own businesses. They all attend the same church and have the same spirit of giving. Today, each is the proud owner of successful businesses in Trenton, Ewing and Yardville.

Victor Villeges immigrated to the US with a dream to own a bakery as his father did in his native Guatemala. With the help of RBAC ,the Mercer County Loan Fund and a local bank, he was able to make his dream a reality. As his business grew and he opened more shops, Victor was able to pay it forward by selling two of his bakeries to friends from his church and recommending RBAC to help with the financing. Victor now owns Guatepan bakeries in four locations in Mercer County.

Juan Carlos immigrated to the US in 2004. He holds a degree in business administration and accounting from USAC in Guatemala. He developed his management skills

while working for a large apparel manufacturer in Guatemala. After moving to Trenton Juan met Victor at church and was soon managing the financials for Victor's bakeries. With the help of his managementskills, Juan was able to streamline the business and reduce cost. Within one year, Juan purchased the Ewing store from Victor with financing from RBAC and the MCLF. Juan was able to pay off his loan in 15 months. His plan for success is "to always be open to work, work hard and to follow God's plan, He will show you the way."

Rosa Cruz Immigrated to the US in 1988. She worked as a nanny, studied English and met her husband Jorge in the next 5 years. Jorge is a child hood friend of Victors and soon he and Rosa were helping out in Victor's bakeries. Rosa also worked for a cleaning company and moved up to a supervisory position. When her children arrived, she stopped working to spend time with them until they entered school. Rosa's dream of owning her own business blossomed and Victor offered her the Yardville bakery. She spent two intense months training with Victor and then purchesed the business with funding from RBAC and MCLF.

Today the Italian People's Bakery in Yardville is thriving. Rosa beleives her success comes from her management and organizational skills. She has a very loyal customer base and a great connection with the local community.

Victor's vision to open a bakery changed the face of Trenton, Ewing , Hamilton and Yardville bringing jobs to Mercer County! With the help of RBAC and the MCLF he was able to open his business , expand and pay it forward to friends and fellow Guatemalans, Juan Carlos Camey and Rosa Cruz.