Unified Sports

Problem:

A sporting goods manufacturer with about 40 employees had never missed a loan payment in eight years, but its bank called the loan.

Solution:

First International Bank structured two loans using federal guarantees, allowing the 43-year-old company to continue operating profitably.

Loans Allow Manufacturer To Keep Making Goals

WATERFORD, CT - It's a manufacturer's nightmare. Through skillful management and hard work you've managed to stay profitable during tough times in New England. You pay all your bills and stay current with your loans. Then the bank pulls the plug for no apparent reason.

It happened to Bob Ferrara, president of Unified Sports in Waterford, Connecticut.

Unified Sports, founded in 1953, is a niche manufacturer of industrial sporting equipment such as soccer goals, volleyball and basketball systems. It has a solid reputation in its core market with school systems and recreation departments around the country. The company is on the forefront of inventive safety systems and holds four patents, including a revolutionary soccer goal that folds away, preventing accidents that often occur when children climb on the goals when games are not in progress. With about 30 deaths in recent years from such accidents, the marketplace was demanding such a product, and Unified Sports' sales prospects were good. In addition, the company had recently purchased a New Jersey company that manufactures mats, pole vault and high jump landing pits, and football blocking dummies, allowing Unified Sports to expand its products within the same markets where it had developed relationships. The company was poised for growth and the future looked bright.

Then the bomb dropped. Unified Sports had never missed a loan payment in eight years, but its bank, among the five largest in New England, called the loan.

"Without replacement financing, we were out of business," recalls Mr. Ferrara. He spoke with bank officials and tried to make them understand how the company was solid; how it had positive cash flow; how it was in the black for six consecutive years; how its loans were fully secured with valuable real estate and company assets. No dice. The bank demanded the note.

After a careful search, Mr. Ferrara turned to First International Bank. Mr. Ferrara needed a lending institution with professional bankers who could think through a problem, use some creativity, and take a fair and complete look at his balance sheet and his business. "First International Bank started acting like our partner compared with our previous banks who took the role of our adversaries," said Mr. Ferrara.

First International Bank did just that, and ultimately provided two loans to Unified Sports and its affiliate totaling $3.25 million. As part of an unusual and creative twist, the bank structured a $2.25 million note to pay the indebtedness utilizing a federally backed USDA loan, and then structured a $1 million SBA commercial term loan to refinance an existing line of credit.

"As the largest user of federally guaranteed commercial loans in New England, First International Bank really understands the ins and outs of the system," said Paul Falvey, executive vice president, Commercial Banking. "In this case it allowed us to put a package together that enabled Unified Sports to maintain its operation, keep its 40 employees on the payroll in Connecticut, and continue the research and development of safer sports equipment."

The relationship with First International Bank has grown, and now Ferrara uses the Bank's private banking services for his cash management needs as well.