Martelli's Metal Fab

Problem:

A steel fabricator needs to purchase a larger facility in order to expand business, but lacks the cash for a down payment.

Solution:

First International Bank provided a mortgage loan for 100% of the cost of acquiring and improving a new 10,000 square foot manufacturing plant, including closing costs.

New Financing Provides Room for Growth

WARRINGTON, PA - Ernest Martelli, owner of Martelli's Metal Fab for 15 years, was operating out of a cramped and inefficient leased building with only 5,000 square feet of manufacturing space and 6 employees. In order to continue to grow and take on more specialty production welding and fabrication jobs, he needed more space.

A larger manufacturing facility was key since the company had invested heavily in specialized equipment that allowed it to offer unique services to many larger manufacturing companies in the area. These customers wanted to give Martelli's Metal Fab more work, but the company lacked the space necessary to take on these additional commitments.

"A lot of the equipment I buy is big, and once you set it up it is too expensive to move it, so I was at a stand still. The business could not expand at all unless we purchased and moved to a larger manufacturing facility," Martelli said.

Ernie approached several other banks about obtaining a loan, but they all required a down payment of 20-30%. "They acted like $50,000 or $60,000 for a down payment was easy to come up with," he said. He needed someone to talk to who could offer financing options tailored to the unique needs of his business, its strong growth potential and cash-flow constraints - factors that other banks' standard loan products did not consider.

"Other banks did not even offer to come out to our business and talk to us," Martelli said. "They basically want you to give them information over the phone and get back to you at their convenience. By the end of the first call with Gerald O'Loughlin, senior vice president and head of First International Bank's Philadelphia office, we had set a day for him to come out to my company. He was very flexible when it came to setting up meetings and even offered to come to my house. By setting up meetings at the end of the day, rather then when my schedule was most hectic, Jerry made things much easier for me."

"Jerry took an interest in the complete picture. I gave them all the information I had about past equipment purchases and my credit line usage. I showed them how I have done everything up until now. First International Bank looked at what I had in equity and discussed what could be done with the money I owed on equipment leases. All of my existing loans and leases were refinanced and the monthly payments were re-worked so that they were half of what I was paying before; and then I got 100% financing on the building at a monthly cost equal to my existing monthly rent."

First International Bank was able to structure a 25-year mortgage loan with no balloon repayment, no financial covenants and no down payment. The new mortgage financed 100% of the costs associated with acquiring the facility and making renovations. First International Bank also provided a 10-year term loan to refinance existing bank debt and leases. To assist with future temporary working capital needs, a new $50,000 line of credit was also established.

"First International Bank took the time to listen and understand our financing challenges and then they delivered a tailored solution," Martelli said.

O'Loughlin said, "Many lenders will focus on making the loan applicant's business needs fit the collateral parameters of their loan programs. At First International Bank, we are committed to assisting privately owned and operated manufacturing companies obtain the financing they need to meet their cash flow and individual needs. That is why our loan officers are empowered to make decisions and are more responsive to new loan requests from both new and existing clients."

Since Martelli's relocation into their new 10,000 square foot facility in a well-established growing industrial park in Bucks County, PA, sales have increased 25 percent and the company has hired three new employees.

"I'm doing all of this for hardly any more expense than I had before," he said. "I have recommended First International Bank to several local businesses and look forward to working with them again."