Bourjois Abboud's business, Advanced Pharma, was booming. It was exciting, but he found it difficult to keep pace with the increased demands of his clientele due to his facility's size. While looking at industry projections, Mr. Abboud realized he needed more space.
In 2004, regulatory changes enacted by the United States Pharmacopeia resulted in higher levels of quality assurance when preparing compounded drugs. To meet the new standards, hospitals began to outsource these drug preparations. Advanced Pharma was established in 2005 to partner with hospitals and deliver IV admixing services that met the new guidelines.
At Advanced Pharma's Houston facility, custom medication dosages are created in a variety of reservoirs such as IV bags, syringes, and pumps. These medications are used during labor and delivery, surgery, rehabilitation, and recovery.
In 2012, Advanced Pharma occupied over half of a 35,000 square-foot multi-tenant building and wanted to acquire an extra 6,000 square feet. The landlord 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 felt overwhelming. In addition, the building owner had many conditions to meet within a very short deadline to close the deal. Because this was a new endeavor, Mr. Abboud understandably had concerns. He remarked, "Our attorney spoke with Community Business Finance, and in a 30-minute conference call we had ironed out all questions or concerns we had."
Laboratory at Advanced Pharma
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 noted, "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."
Because of the 504 loan, Advanced Pharma's monthly payments are now lower than the previous lease rate. Mr. Abboud used the extra savings to pay for property taxes, maintenance, and utilities, and by owning the building the company added a large asset to its 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 offices to increase production space. Mr. Abboud added, "With a longer-term loan, we can utilize our lower monthly payments to divert our cash to the expansion process."
Since purchasing the building, Advanced Pharma's revenue has increased by 40%. The staff size has also increased by 20%. The larger space and increased cash availability are allowing Advanced Pharma to meet the challenges of growth, now and in the future.