After more than three decades, FB County founder Tom Kim was ready to purchase commercial real estate for his innovative Los Angeles-based clothing and personal-goods company. “For a growing business like FB County, there are so many benefits to owning property – and the SBA 504 program makes it doable,” he says.
Here’s how TMC Financing helped him secure an SBA 504 loan to buy a property that suits his needs today with room for future expansion, while stabilizing occupancy costs and gaining long-term financial benefits.
Starting small, aiming high
Tom started FB County while in college, formalizing the business in 1991. Since then, his sought-after clothing and other goods have become staples of streetwear style. Bestsellers include their signature “Checker” shirts and “Charlie Browns,” which were featured in Fast and the Furious, Straight Outta Compton and, as Tom says, “Just about every other TV show and film” that highlights street style and culture.
Unlike today’s social-media-driven buzz (which can catapult a brand overnight), FB County grew through strategy and persistence, simply because the internet was barely in existence then and social media didn’t come around until well after Tom was a seasoned entrepreneur.
FB County’s early growth was achieved through wholesale accounts, which still make up a majority of the business’s sales. Today, that’s complemented by a robust ecommerce presence, with sales through multiple online stores (including FB County’s own and others).
“The last several years, we’ve experienced incredible growth,” Tom explains, primarily because he and the rest of FB County’s five-person team know how to leverage the power of social media. “Social media platforms have been incredible for our business, because we can ensure that our products get seen by our target market – and that’s reflected in our current revenue and forecasts.”
Securing future costs and benefits by purchasing commercial property
Tom says that FB County had outgrown the space they’d had and he knew the type of property that he wanted to purchase – a warehouse that would support current operations with enough land to construct additional buildings.
“I spent more than two years searching for the right opportunity,” he says about the property he’d eventually purchase. It ticked all the boxes for Tom’s vision, including 37,000 square feet of existing warehouse space and room for expansion throughout the 80,000-square-foot lot. He negotiated a fair price and moved forward with financing.
TMC partners on an SBA 504 loan
SBA 504 loans are the most popular SBA offering for businesses seeking to purchase owner-occupied commercial real estate because of the tremendous benefits for borrowers. With the SBA 504 program, small business owners can:
- Purchase property with only a 10% down payment (for most properties), instead of the 30-40% that’s required for conventional commercial mortgages
- Benefit from a fixed, below-market interest rate over the life of the loan and from a longer repayment term, which makes it easier to budget and manage occupancy costs
- Gain significant tax benefits while building equity for long-term financial security
Tom learned about the SBA 504 program from his business and banking connections and soon, he was working with TMC Business Development Officer Jennifer Davis to finance the $9.2 million deal.
“When I learned about the 10% down payment, that sealed the deal. Otherwise, it’s almost impossible for most small business owners to buy property with a conventional loan because the down payment is so high – that’s money that we need to invest into our business,” he explains. “The low down payment meant that I could buy the property and still keep funds in-hand for reinvestment in FB County.”
He adds, “Working with TMC was an excellent experience. Jennifer and the whole TMC team were really great.” Together with the assistance of Patrick McDonald of Del Mar Commercial Finance (DMCF), they overcame challenges that arise with large projects like this and moved the deal forward.
“Complex SBA 504 deals require experience and TMC brings that to the table,” Jennifer says. “Tom’s project is a great example of a visionary entrepreneur meeting the right financing team with TMC and DMCF. We’re thrilled we could make this happen for FB County.”
And just a month after closing, FB County moved into its new space.
When the time is right for your business, TMC Financing can help
“Four years ago, I wouldn’t have been ready to do this, but our growth has been so substantial that it made financial sense now,” Tom says. “If you’re considering buying commercial real estate and the financials work out, you gain so many benefits. As long as it’s the right move at the right time, then you have to go for it.”
If it’s the right time for your business or if you’d just like to learn more, contact us.
About TMC Financing
Founded in 1981, TMC Financing is the leading provider of SBA 504 commercial real estate loans in the nation, funding projects worth over $14 billion across Arizona, California, Nevada, Hawaii, and Oregon. Over 7,000 businesses have benefited from this financing, resulting in the creation of an estimated 60,000 jobs.