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Problem:
A manufacturing company was experiencing rapid growth, approaching
$20 million per year. Their sales were straining the company's
capacity, but orders were continuing to escalate. The company
desperately needed to expand its capacity, but did not have
available cash or collateral to qualify for the bank loans they
needed to finance the expansion. They also did not want to leave
Southern California.
The SRG Solution
SRG partner Fred Solomon discovered an industrial development
bond program with City and state agencies designed to attract
new manufacturers. The client applied and qualified for government-backed
financing at a 5% rate, with 90% leverage. The new location
also entitled them to Federal and State empowerment zone credits,
providing significant tax reductions for them in subsequent
years. The result? Since the move 2 years ago, the client's
sales have more than doubled, and are projected to reach $80
million.
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