Low cost financing expands electronic component distr.

M.S. Hi-Tech Inc., a distributor of electronic components and related products has been an exclusive distributor of product lines (as a franchised, stocking distributor) for over 18 years. The company has been operating from a leased space of 4,200 s/f in a multistory building. When the landlord put the building on the market, M.S. Hi-Tech found itself in the position of having to move. In addition, the company's success engendered a need for additional space. They looked in the area and found several possible locations. They then approached their bank but discovered that conventional financing for a small business would require them to put 30-40% into the building cost plus pay for renovations and soft costs. As an expanding small business, they needed to preserve their cash for working capital needs. Enter, Steve Molfetta, VP lending LI Development Corp/Greater New York Development Co. (LIDC/GNYDC), introduced to M.S. Hi-Tech by their accountant. He told them about the SBA 504 loan program that could provide 40% of the total project cost in a second mortgage position behind their bank. By using the 504 and bank financing together, it meant M.S. Hi-Tech would only have to inject 10% of the total project cost- thus letting them use their cash for operations. Company founder and owner Michael Montenes jumped at the opportunity to not only own his own building, but also have additional space for growth, and all at a 10% injection. The blended rate between the bank (TD Bank) and LIDC/GNYDC 504 financing was excellent. And the fixed rate nature of the 504 loan enabled Montenes to plan for the future. Thanks to this low cost financing package, M.S. Hi-Tech is now in 7,127 s/f in Hauppauge (Smithtown) with room for expansion, stability of location and the ability for owner Montenes to build equity for his family, a "win-win" for all! For information about low cost 90% financing to acquire, renovate or refinance facilities for businesses and non-profits, contact LIDC/GNYDC at (866) 433-5432 or see them on the web at www.lidc.org. Roslyn Goldmacher is the president and CEO of the Long Island Development Corp. (LIDC) and the Greater New York Development Co. (GNYDC), Bethpage, N.Y.