The SBA program caters to small business owners’ dreams, providing the means to assist with the necessary financing to develop and expand.
When small business owners decide to buy, build or renovate their real estate, machinery or equipment, they are putting down roots in their communities and taking a big step towards ensuring the continued growth and success of their businesses. Michelle Didesch-Rouland is one such business owner. With over 16 years of experience in education in the Peoria area and a master’s degree in early childhood education, she decided to take her skills to another level and founded the A+ Children’s Academy, the only facility in central Illinois to teach using the “Reggio Emilia approach,” which emphasizes visual learning to help brain development in early childhood. However, her school might not have been possible without the Small Business Administration (SBA) loan programs designed to help small businesses finance their development and expansion.
Didesch-Rouland had previously been involved with a daycare facility in Peoria, but she didn’t feel that she could do for children there what she felt needed to be done. She saw a need for strong, early-childhood education focusing on brain development, and once the idea was stuck in her head, put together a business plan and started looking for ways to finance her project. At one of the banks she visited, she learned about the possibility of using SBA loan programs. Like most people, she was unaware of the program but once she heard of its benefits for small businesses like hers, she didn’t hesitate.
“My banker, Mike Woodcock, was so helpful! He walked me through the whole process,” says Didesch-Rouland. “I used to call it my ‘Mike Woodcock homework.’ Every time he gave me something else I needed to do, I went back to fix it. There was a lot of paperwork, but I think…that going through [it] made me a better business owner. And I really didn’t find it cumbersome, especially since a lot of the paperwork (like a business plan and profit & loss statement)…I would have had to do anyway, even for a regular commercial loan.”
In addition to the SBA loan, Didesch-Rouland found an investment group to construct the facility on North Big Hollow Road with a three- to five-year lease-to-own deal. After a year of working full time, juggling three children, doing all the “Mike homework,” building, assembling equipment and hiring teachers, she opened the A+ Children’s Academy in September 2008. Despite the economic downturn that started right after its opening, the business was doing very well and growing. Starting with only seven children, the Academy now has 114 kids, ranging from six weeks old to preschool, and 30 employees, including two office staff, a cook and a part-time art teacher.
Didesch-Rouland was very happy and satisfied with her SBA loan. “If I had a regular commercial loan, my interest rates would be so much higher,” she explains. “It would take me so much longer to pay off. These rates are manageable so we could, even as a young company, keep it financially healthy.” Actually, her satisfaction with the SBA loan program was so great that she recently closed another loan, this time opting for the SBA 504 loan program. The SBA 504 loan is a partnership between a Certified Development Company (CDC) and a local bank. Working with the lender, the CDC provides up to 40 percent of the financing of the project, while the partnering lender typically provides 50 percent, leaving the business owner with a down payment as little as 10 percent. In addition to an affordable, low down payment that conserves valuable working capital, the SBA 504 loans offer below-market, long-term fixed rates, making for predictable, low monthly payments for the business.
“I had a three- to five-year lease-to-own deal with my investors,” Didesch-Rouland explains. “And just now, after three and a half years, I closed my second SBA loan to buy my building, which…lowered my mortgage payment by almost $2,000 a month. I can put that money into improvements for my building, pay raises or vacation days for my teachers, so it really helps our cash flow.”
Knowing the drill this time, the loan application process was a piece of cake for Didesch-Rouland. She is really excited that she finally owns her own building and is already contemplating future plans. “I would like to have three to five schools in the area,” she says. “If everything goes well, I would like to have a place where I [can] build by next year. So it looks like I will be needing another SBA 504 loan!” iBi
Illinois Business Financial Services is a nonprofit Certified Development Company that works in partnership with the SBA and local banks to provide fixed rate loans aimed at expanding small businesses. To learn more about the SBA loan program, visit ibfs.org or call (309) 495-5976.