504 loan helps sew up new location.
In 2005, the contract sewing company was running out of room at its 22,000-square-foot facility in northeast San Antonio. Even more troubling, it was having difficulty finding and retaining enough workers to fill the orders that were starting to pour in from the military and local medical industry.
So with the help of the City of San Antonio Economic Development Department and a real estate loan through the U.S. Small Business Administration's 504 program, the company picked up and moved into a bigger space in the part of town where most of its employees live.
"It is closer to their schools and their day cares and they don't have to commute as far," Jordan said. "(The building) met all of our criteria and is really the perfect fit."
Participation in the 504 program requires a certain level of job creation or retention, which UEMC easily met. And because the company ks now in a designated HUD Empowerment Zone, it is eligible for an annual tax credit of up to $3,000 for each employee who lives in the zone. That accounts for 70% of its work force.
At the time of the move, Mario Hernandez, president of the San Antonio Economic Development Foundation, said it was good to get an employer of UEMC's size into that part of town.
"(UEMC) has a diverse group of customers and is a stable and solid company for this community," Hernandez said. "By locating close to their work force, it will help with productivity and reduce absenteeism."
The $1.8 million 504 loan was financed over 30 years. Half the money came from lender Wells Fargo and 40% was from the South Texas Business Fund, a certified development company that works with the SBA. The rest came from the company.
The 504 loans are used to finance major real estate purchases and give small businesses chaces to capital that they probably would not be able to get otherwise, said Mike Mendoza, a senior loan officer with the South Texas Business Fund. In mid-March the fund was helping to arrange 504 loans with 20-year terms at a fixed 5.7% interest rate.
Mendoza said the interest rate on the loan to UEMC was in the mid-6s. As a CDC, the fund's portion of the loan is guaranteed by the SBA.
"We can get attractive rates because the money is backed by the federal government and the investors know they are not going to lose their money," he said.
Jordan said the relocation was risky because mortgage payments went up a lot, but it has paid off for UEMC even with a slowdown due to the economic downturn.
The company, which had revenue of more than $6 million in 2007, saw sales dip to $5.5 million in 2008. It had to trim its number of employees to 176 from a high of 285.
"We started to see a slowdown in October," Jordan said. "Now, things are starting to pick back up, but we are having trouble getting the materials in here."
When the economy began to sputter, mills that make the raw materials used by UEMC began streamlining, Jordan said. Now there is a scarcity of materials and irregular shipping patterns.
"It has been a Catch-22 for us," Jordan said.
UEMC was founded in 1949 by Jordan's grandfather and started as an electric motor-repair company. It was originally known as United Electric Motor Co. Then in 1961, Kimberly's father, Jack Jordan, was looking for work the company could secure from the nearby Air Force base.
But the only thing he found intriguing enough to bid on was a contract to sew curtains to put in cockpits of B-52 bomber aircraft. The specially designed curtains were to be used to shield the pilots from the heat and radiation of a nuclear explosion.
"That's how we got started in sewing, by doing these blackout curtains," Jack Jordan said. "We made thousands of them."
The company's foray into sewing proved to be lucrative. It evolved into a sewing manufacturer, churning out products for the U.S. military, the medical industry and the retail market.
By 2001, the company was split in two, with the motor-repair business going one way and sewing going the other. Jack and Kimberly Jordan took the sewing business and formed UEMC--along with Jack's wife, Linda, and Denice Hild, a family friend. They started with 21 employees and 18 sewing machines.
Today, UEMC makes all kinds of accessories for the military, including pouches, holsters, knife sheaths and other items that can be attached to a soldier via belts or straps. They also make full-length bomb-protection suits and special armor plating for soldiers to wear in combat.
Kimberly Jordan notes that military items are only part of the company's diverse product line, which features more than 500 items.
Jack Jordan, president;
chief operating officer;
Linda Jordan, vice president;
Denice Hild, vice president
4343 W. Commerce St.,
San Antonio, TX 78237
2008 revenue: $5.5 million
|Printer friendly Cite/link Email Feedback|
|Title Annotation:||FROM BEGINNERS TO BIGSHOTS|
|Author:||Thomas, Mike W.|
|Publication:||Bellingham Business Journal|
|Date:||May 1, 2009|
|Previous Article:||Smoother sailing with 8(a) training.|
|Next Article:||Success built on long-term view.|