“I was completely amazed by how much my SBDC Business Advisor would mentor me. I didn’t know anything about what could be done or how to proceed and they took me step-by-step through the process and knew how to do it. The information from West Company about the process and financing was so thorough and effective that by the time I reviewed the loan documents I actually understood them!”
Tomessa and Galo Villalpando
Rantala Heating & Sheet Metal, Inc. installs and services forced air, hydrolic (e.g. radiant floor), and solar heating systems for home owners on the Mendocino Coast. They manufacture custom metal works including gutters and vents for homes and businesses and provide sheet metal to roofing contractors. The company was founded in 1995 by Edward and Elizabeth Rantala and purchased by the Villalpandos in 2009. Since its inception, Galo Vallalpando worked side-by-side with Edward Rantala, helping him establish and grow the business.
The Villalpandos’ biggest challenge was the fact that the opportunity to purchase the business was totally unexpected and thus they weren’t prepared for it. In addition the time frame for the purchase was such that they needed to act quickly, which was difficult because they had no experience with the acquisition of a business nor with the loan process required for them to secure the funds necessary to do so. When they first began the process of trying to secure a loan they learned that they had too many assets to qualify for a small loan and not enough to qualify for something much larger nor did they qualify for other specialty loans. “The fact we were able to apply for an SBA loan with the help of West Company was critical to our ability to purchase the business.”
Once it was clear that an SBA loan was an option for them, the next challenge was the length of time it took and the application materials that had to be prepared including a purchase agreement, three-year forecast, documents on the qualifications of the purchasers and other information required by the lending entity and its underwriters.
Tomessa worked with an SBDC Business Advisor for the West Company to determine the type of loan that would work best, the documentation required, the amount of money that might be secured and the likely interest rate and payment structure.
The SBDC helped Tomessa develop the assumptions that would determine the three-year forecast for the business under her and her husband’s ownership, helped her understand how spreadsheets work, and discussed the specifics of the assets being purchased.
Tomessa and Galo secured the financing they needed and acquired the business as of December 1st, 2009. They retained the existing employees and, by the end of their second month of ownership, they were able to increase net profits by 180%.