A Delaware farmer is expanding pet food production as a recipient of the first-ever 504 Loan from First State Community Loan Fund. Truman and Mary Schrock, lifetime residents of Greenwood, are expanding their pet food company, Beaverdam Pet Foods.
Recent recalls of major pet food brands have been good for business pet owners are looking for healthy, minimally-processed food.
The Schrocks needed a financing partner that would understand their business. They were faced with a tough decision; the business was outgrowing their warehouse, rent was increasing, and Beaverdam needed to purchase their leased property or move.
The Schrocks decided to apply for a 504 Loan through First State Community Loan Fund.
The 504 Loan Program, is a partnership between First State CLF and the Small Business Administration (SBA), designed to provide financing for the purchase of fixed assets, like real estate or buildings, at below-market rates.
First State CLF can lend small businesses up to $5 million under the program. The loan is unique, requiring as little as a 10 percent equity infusion from the business owners, whereas most traditional loan programs require 15 percent or more.
“First State Community Loan Fund didn’t just give us a loan, they invested in us,” said Schrock, “Our sales have exceeded all of our goals and our business was growing, yet banks weren’t providing us with realistic financing choices. The 504 loan allowed us to expand without impeding our day-to-day business.”
The Schrocks plan to break ground on their warehouse expansion in the spring, purchase their property, and hire two additional full-time staff. They’ll also rely on continued technical assistance from First State CLF.