March 21, 2012
By Kevin Riba, Regional Director of Business Development
CRF loans don't arrive with sirens blaring. But they should be. Because CRF comes to the rescue of companies like MNSTAR that desperately need financing to help them retain and add jobs, protect and serve their markets.
MNSTAR Technologies is a perfect example of the type of company that CRF can help with an SBA 7(a) loan. (We announced in January that CRF was named as one of only 14 nationwide non-banking institutions to offer SBA 7(a) loans.)
MNSTAR, which designs and manufactures components like wire harness systems for police and emergency vehicles, had everything going for them - good credit, great prospects, loyal employees. But while they were able to remain current on all their debts, financial difficulties from previous years resulted in an improperly structured balance sheet that hampered their ability to attract short-term working capital, which they needed to move forward and grow.
Since 2009, their worst year, MNSTAR has been on the upswing. In 2010, sales increased by 91 percent over 2009, and in 2011, sales were up again by almost 42 percent. Despite this recent growth, they were unable to get traditional financing because of their debt ratios and past sales record.
A $1.2 million loan from CRF will enable MNSTAR to free up cash flow to help fund growth by restructuring debt into a long-term loan. The company will be able to retain 80 full time jobs - plus, they plan to double their staff in the next three years. They also expect to double their revenues in part by developing an expanded product line to attract new customers and industries."
We never worked with the SBA before because it's a scary process," said Mike Rhodes, MNSTAR president and owner. "CRF helped us put our best foot forward and navigate the SBA process. Thanks to CRF, we got an offer in hand quickly and efficiently which will enable us to sustain and add jobs here in northern Minnesota."
Posted by: CRFUSA