Bourjois Abboud's business was booming. While this growth was exciting, he found it difficult for his facility's size to keep pace with the increased demands of his clientele. Looking at industry projections, Mr. Abboud realized he simply needed more space.
In 2004, regulatory changes enacted by the United States Pharmacopeia required higher levels of quality assurance when preparing compounded drugs. To meet these new standards, hospitals began looking to outsource these drug preparations. Advanced Pharma was established in 2005 to partner with hospitals and deliver IV admixing services that met the quality assurance levels established in the new guidelines.
At Advanced Pharma's Houston facility, they create custom medication dosages in a variety of reservoirs such as IV bags, syringes, and pumps. These medications are used during labor and delivery, surgery, rehabilitation, and recovery.
By 2012 Advanced Pharma occupied over half of a 35,000 sq. ft. multitenant building and wanted to acquire an extra 6,000 sq. ft. When Mr. Abboud approached the landlord, he offered to sell the building to Advanced Pharma. Property ownership appealed to Mr. Abboud, but he wanted advice from experts. "Given that our experience was in pharmaceutical admixing and not real estate acquisition, we turned to Community Business Finance to help us secure a loan to purchase the building," he said.
Taking the leap from leasing to property ownership can feel overwhelming for any business. In addition, the building owner had many conditions to meet with a very short deadline to close the deal. Because this was a new endeavor, Mr. Abboud understandably had concerns. He remembers, "Our attorney spoke with Community Business Finance, and in a 30 minute conference call we had ironed out all questions or concerns we had."
Community Business Finance quickly worked hand-in-hand with a commercial lender to provide an SBA 504 Loan. "No one expected the loan to proceed at that speed. It was amazing." With Community Business Finance's support and experience, the owner's conditions were met on time and the loan terms were acceptable to Advanced Pharma. Mr. Abboud notes, "I never felt uncomfortable or rushed in the process. They provided us with a competitive interest rate, offered affordable terms, and lent expert advice to navigate through the regulations and paperwork needed to close the deal."
As a result of using a 504 Loan, the monthly payments are lower than the previous lease rate. Advanced Pharma used the extra savings to pay for property taxes, maintenance, and utilities, and by owning the building they have added a large asset to their portfolio.
Advanced Pharma is in the process of expanding into the whole building. They are creating a bigger warehouse and adding more equipment. They also plan to consolidate the corporate office to increase production space. Mr. Abboud adds, "With a longer-term loan, we can utilize our lower monthly payments to divert our cash to expansion process."
Since purchasing the building, Advanced Pharma's revenue has increased by 40% and they have increased their staff size by 20%. The larger space and increased cash availability allow Advanced Pharma to meet the challenges of growth, now and in the future.