Local business receives SBA loan to expand

Businesses throughout the Village of Ruidoso have often sought help to start up a new business whether small and large. It can be difficult to find the necessary funding to get your business off the ground.

The Small Business Administration (SBA) can help ease the application process. The Cornerstone Bakery and Café, owned and operated by Steve Gomez, recently received a loan through the SBA and the New Mexico-based Enchantment Land Certified Development Center Company(ELCDC) non-profit organizations.

Some years after purchasing the restaurant in 2010, Gomez arrived at the conclusion that there was an extreme need to expand, not only the size of the kitchen and dining areas, a larger parking area, and the need for additional. However, because the restaurant was so small, this could not be accomplished unless Gomez could find a larger facility.

“This will be or last expansion. We have adequate space now and we are busy every day of the week. We have expanded the ambiance and the dining experience we provide to our customers,” Gomez said.

Gomez is by trade a realtor and set out on this business venture as a hobby. After many years of success, he knew it was more than a phase for him. “It takes so much more of your personal time to make it work, it is a seven day a week job. I love what I do and I love my customers,” Gomez said.

Leasing the building is a concern for many business owners because of the high fees, taxes and not owning the land a business ‘sits’ on. The previous business only had seven parking spaces, and occasionally the church allowed his customers to park in their lot. Gomez took his bankers advice and reached out to the SBA and ELCDC.

Don Panagrossi works closely with the ELCDC and their clients. He has been with the program since 2002 providing information and assistance to potential borrowers. The program is able to fix a loan rate at 20 percent and is one of the reasons this program is different from other lenders. These two features of the program make loans accessible to business owners that may otherwise be turned down.

Gomez’s banker at First National Bank, Deborah Romero senior commercial loan officer in Alamogordo, parented with Panagrossi to make the process work smoothly for Gomez.

“These guys really helped me out so much. They were extremely professional and did everything they could for me. I am truly grateful for all their help. I recommended seeking their expertise if you are looking for a small business loan,” Gomez said.

SBA 504 loans can be used for either a small business expansion or improvements.  The ELCDC helps the borrower navigate through the process, the lengthy amount of paper work and the guidance needed to obtain a small business loan. However, Gomez took his time with his build over a two-year period.

Finance officers (lenders) determine the risk of a loan for his business. Restaurants are a very high risk for a business loan, even more so in a small town and many are rejected. When a risk factor is determined, (either a high or minimal risk) the loan officer will try and figure out a way to mitigate the risk.

The SBA 504 is a path that a potential borrower may choose in order to obtain a fixed rate loan. After meeting with a group of lenders in Las Cruses, Gomez was directed to contact the SBA 504 loan program that worked with his banker in Ruidoso.

The nonprofit organization usually provides 40 percent of the total loan and the bank provides an additional 50 percent leaving the borrower to provide the remaining ten percent. These loan terms can be either ten, 20 or 50-year repayment plan at a fixed rate. “I cannot thank the guys enough that helped me. I have a fixed rate for 20 years. This is just unheard of. I was able to get a substantial portion of my loan at 20 percent,” Gomez said.

The process to obtain a fixed rate loan can take years to acquire. Through the help of local banks and the SBA, Gomez was able to land a 20-year fixed rate loan with 20 percent down at ten percent as a private investor. In most cases, small business loans are reviewed every five years and renegotiated. When a rate is not locked in, they can change during these reviews.

The potential for the rate can sky rocket (the rate at the time of review will apply) and it often places the borrow at risk of losing the business because of the inability to pay back the loan. Additionally, the government backs the contract through the private investor, which is First National Bank in Ruidoso.

Since receiving the SBA 504 loan, there are jobs that once were not available. The restaurant now has a staff of 45 full time employees compared to the previous 13. Even though many of these employees were hired during the summer, there will be a need to replace many of the staff when fall arrives.

Some of the employees will be returning to school, both High School and College. Gomez will need to keep his staff numbers up and will be hiring soon for all positions. Since the business has moved to the new and larger location they have tripled the size of the dining area and have 70 parking spaces.  

The business has recently added a drive through window and online ordering with finances from this loan.

“This has helped our community by providing jobs that were not available before. I love my community and try to give back to it as much as I can,” Gomez said. “I simply cannot thank the loan program, my lenders, and my customers for making this all possible. I highly recommended any one looking for a small business loan to contact the SBA and ELCDC. It is amazing how much they helped me out.”

For further information regarding the ELCDC and the SBA 504 loan program visit www.elcdc.com or call 505-843-9233, to contact a First National Bank lender go to www.fnb4u.com.

Cornerstone Bakery and Café, located at 1712 Sudderth Drive, is open seven days a week. For more information go to www.stonebakerycake.com or call 575-257-1842.