Small-business Purse Strings

Chiropractor Steven Loehr has big plans.

In February, the former Meek Chiropractic doctor decided to start his own practice. But Loehr realized quickly he would need help to develop the clinic of his dreams.  

Loehr’s vision for the business, which opened March 4 as Loehr Chiropractic and Acupuncture LLC, is now taking shape as saws and nails find their calling in a two-story structure he’ll soon call his office.

In April, Loehr secured a U.S. Small Business Administration-backed loan for $507,600 to launch his private practice at 3021 E. Sunshine St. Loehr and three of the company’s doctors currently are working out of two, 1,000-square-foot temporary offices behind the 6,600-square-foot former Sleep Mart store he is renovating in the Habersham Center.

“I was open about six weeks before the loan finalized and closed. I went out of pocket at first,” Loehr said, adding the funds support all aspects of operations, including equipment, renovations and payroll. “I couldn’t have done this without the loan.”

Loehr said he went with an SBA-backed loan from Metropolitan National Bank because it had lower fees and interest than a traditional commercial loan.

Loehr’s financing was among 367 SBA-backed loans worth a combined $108.6 million secured by area business owners the past year, according to Springfield Business Journal’s review of SBA data from the southwest Missouri district. Loans issued since June 2013 shed light on several startups and other major investments coming down the pike.

With the help of a $3.08 million SBA-backed loan, Aurora, Colo.-based H&H Management Group plans to build a $12 million, 60,000-square-foot SpringHill Suites by Marriott in north Springfield. Another multimillion-dollar project supported by SBA-backed funds is Battlefield Lanes owner Andy Bartholomy’s expansion and rebranding as Andy B’s Luxury Bowling and Multi-Tainment Complex. The bowling alley secured a $1.85 million SBA loan to support development of an underground laser tag arena and private bowling lanes set for completion in December.

Emphasis on small
For the period reviewed, loans averaged $296,724, on par with the SBA’s fiscal 2013 but about 25 percent down compared to fiscal 2012.

“Usually, those smaller loans are the types of loans given to startups,” said Springfield SBA Branch Manager Suzanne Stearman, noting the SBA has pushed programs for smaller loans in recent years. “We’ve been doing no guarantee fees, which is an upfront fee of generally 2 percent of the portion the SBA guarantees. That is what the borrower has to pay, so we’ve waived that.”

On the smaller side, downtown retailer Five Pound Apparel LLC received a $150,000 SBA-guaranteed loan and opened a second location this year in Farmers Park, and a $50,000 loan was issued to Dwight and Kara Amstutz, the owners of Hometown Veterinary Hospital PC who are building a new clinic on West Republic Road.

Stearman also noted a penchant for terms unique to traditional bank loans.

“We’re seeing more in changes in ownership, as well. We also see those who don’t have enough collateral to fully secure the loan or they need a longer term than the bank can normally do,” Stearman said.

Karin Bell, vice president and SBA program manager for The Bank of Missouri, said financial projections are critical when approving an SBA-backed loan.

“We are looking at cash flow needs, the eligibility – whether they meet the criteria for being a for-profit, being a small business, based on SBA standards. We look at business plans. That’s very important to us,” Bell said. “It’s not necessarily all startups. You might have a business that is ready to go to the next level. So, we ask to see business plans and projections of how they’re going to get there.”

She added historical performance and management structure is part of the picture, as well. “It’s all about what the borrower brings to the table,” she said.

According to SBJ’s review, The Bank of Missouri wrote 22 SBA-guaranteed loans ranging from a $35,600 loan to Ross Steelman for general automotive repair in Billings to $422,100 for Thrive Autism Solutions Ltd. in Aurora. In Springfield, the bank also supported Incredible Pizza’s operations in San Antonio, Texas, with a $309,000 loan.

In SBA’s 28-county southwest Missouri region, Liberty Bank produced the most SBA-backed loans, with 122 during the last year.

One size doesn’t fit all
Stearman said SBA loans aren’t for everybody. During the past year, loan terms spanned 10 to 25 years and loan amounts range from $35,000 to $5 million.

The largest local SBA-backed loan in that time was secured by BG Services Inc. in Rogersville. Controller Lisa Singer said the owners of the auto-products distributorship used the money to relocate to Fenton, where the business already operated a warehouse.

Loehr, on the other hand, is planting his company’s roots here.

With his aggressive plan – the staff has tripled since opening and three doctors were added, along with investments in a website and blog – Loehr aims to create the third largest chiropractic office in the state. By October, Loehr Chiropractic is expected to operate 12 treatment and exam rooms, two therapy bays and two massage rooms. Loehr currently employs nine, and he plans to hire more in the next month.

“I could be more profitable if I was by myself, but my vision is bigger than that,” he said. “That’s where the SBA came in.”[[In-content Ad]]