JUNE 1, 2016 (Alabaster, AL) – Since Truemark Metals LLC acquired Howell Steel, a local supplier to residential contractors in Alabaster, AL, its twelve employees have new clarity about their futures on the job and the region’s building industry has had continuous service.
Howell Steel has been fabricating and installing steel products for home construction since 1987. Its reputation for quality and value manufacturing of products as diverse as I-beams and hand rails was hard earned among greater Birmingham’s biggest residential contractors. Yet its staff of professionals – a quarter of whom have been employed there for over a decade – faced an uncertain future when the company founder retired. Would the business be bought? Would new owners replace the staff?
At the same time Tyler Whitson was pursuing his passion for ownership in the construction field. “I love the building process,” he said. An accountant by training he worked in real estate during the 2000’s and says his passion for the business comes from years of working with contractors and subcontractors in real estate development.
The transaction wasn’t black and white though. After the economic downturn of 2008 and the collapse of the US housing market Whitson went back to work as a CPA. A serial entrepreneur who says he emerged from the 2008 economic downturn “wounded and limping,” Whitson has spent the last several years rebuilding his own career and balance sheet – and waiting for the right opportunity to re-enter the building industry. Then he learned the founder of Howell Steel was selling.
Whitson, like many other small business owners who were challenged in the 2008 recession, could not secure a bank loan, despite being on solid financial footing today. He was however able to use a federal program designed for exactly this scenario: The Small Business Administration 7(a) loan.
Whitson established a new company, Truemark Metals, and secured a $250,000 SBA 7(a) loan to enable the acquisition of Howell Steel. The SBA 7(a) program provides the flexibility to finance business transactions that traditional bank lenders might have a hard time underwriting due to a variety of reasons ranging from insufficient collateral to a limited business track record or the need for longer than conventional terms. The loan was provided by Maine-based CEI 7(a) Financing LLC (“C7a”) which specializes in the loans. It partners with mission based lenders and organizations across the U.S. to identify lending opportunities.
Colette Twigg-Rowse of C7a who is responsible for credit and portfolio management says plenty of small business owners are ready to invest in following their passions, growing their enterprises and moving forward but have challenges on their balance sheets stemming from the recession of 2008 that they fear hold them back. That doesn’t have to be the case. “Congress created the SBA 7(a) program to make monies available to businesses that can’t secure financing under reasonable terms from traditional commercial lenders. We are using this valuable tool to help communities rebuild through job creation and security whose benefits domino throughout the region,” she says.
Just a few months into new ownership Whitson reports a successful transition to working with Howell Steel’s legacy customers. He is preparing to add an additional position to his staff and has his sights set on how to grow the business.