Careful Pre-Planning Helps Complex Industrial Business Secure an SBA Loan
Rod Meyer had worked in Minneapolis 25 years with the market-leading industrial x-ray imaging equipment company, rising to vice president of sales and leading a tenfold increase in capital sales, before the company was sold and narrowed its product line.
“The new company decided to focus on standard x-ray imaging systems. This decision opened an opportunity for us to start a company doing the same things I’d been doing, serving customers in the North America market who needed custom x-ray imaging systems,” he says.
[tweetthis display_mode=”box”]See how the #UGA #SBDC helped a client secure a $1.35M SBA loan helping them expand their #smallbiz:[/tweetthis]
Meyer’s sterling reputation among his customers and his willingness to strike a deal with his former employer to sell its standard equipment helped him decide to found Pinnacle X-Ray Solutions Inc. in April 2014, after he had moved to Suwanee.
But he had no capital equipment for his start-up. So he went to the Bank of North Georgia to apply for a Small Business Administration loan.
“We needed to get capital equipment into our facility to perform demonstrations, applications and inspection services,” says Meyer. “The local bank led me to the University of Georgia Small Business Development Center to get help writing a business plan that I could take to the SBA to get the loan.”
And that’s where Meyer met business consultant Benny StaRomana, a consultant in the Gwinnett office of the UGA SBDC.
“It became clear that the bank would not approve the loan unless there was a solid document its officers could make their decision by,” says StaRomana. “He needed to simplify a complex business model in a way they’d understand.”
During their first few meetings they focused on understanding and articulating Meyer’s business model. “After that we could comfortably generate his financial projections, which had to stand scrutiny by the most astute financial managers. It was a pretty high bar to meet to get the bank’s approval,” he says.
StaRomana felt that an important part of the approval strategy was to get a face-to-face presentation with the bank before the application was submitted. So he arranged the meeting and coached Meyer on preparing for and making his presentation.
“Ultimately, Benny is the SBDC for us,” says Meyer. “He was very familiar on how the bank and the SBA required the business plan to flow with the financials. We took our original plan and modified it, with his guidance, to show the banks what they needed to see.
“After our two-hour presentation, the bank officers said they had never seen a better presented, well-put-together plan than what Benny and Pinnacle had presented to them.”
Pinnacle X-Ray Solutions received an SBA loan of up to $1.35 million that has allowed the company to purchase large capital equipment. Pinnacle started with 5,500 square feet of manufacturing space in September, which has grown to 12,000 square feet in less than a year.
The loan has also enabled Meyer to hire additional professionals for mechanical and electrical engineering positions. “We started out with two employees and now have six, with plans to add up to three more people by the end of the year,” says Meyer.
“We are doing phenomenally well.”
StaRomana says that Meyer had no previous entrepreneurial experience before he “got a crash course” in managing his first business – from marketing to operations to administration and overall management – as he prepared his business plan and presentation.
“Rod is a model to other entrepreneurs in that being open-minded to advice and coaching is important to all small business owners.”
Meyer agrees. “To get to the next level, you need help. We are very grateful for all the work the SBDC has done for us through Benny. And I recommend that any small business contact the UGA SBDC to see how they can help.”