CRF Helps MNSTAR Protect and Serve their Markets

CRF to the Rescue!
CRF Helps MNSTAR Protect and Serve their Markets

By Kevin Riba, Regional Director of Business Development

CRF loans don’t arrive with sirens blaring. But they should be. Because CRF comes to the rescue of companies like MNSTAR that desperately need financing to help them retain and add jobs, protect and serve their markets.

MNSTAR Technologies is a perfect example of the type of company that CRF can help with an SBA 7(a) loan. (We announced in January that CRF was named as one of only 14 nationwide non-banking institutions to offer SBA 7(a) loans.)

MNSTAR, which designs and manufactures components like wire harness systems for police and emergency vehicles, had everything going for them – good credit, great prospects, loyal employees. But while they were able to remain current on all their debts, financial difficulties from previous years resulted in an improperly structured balance sheet that hampered their ability to attract short-term working capital, which they needed to move forward and grow.

Since 2009, their worst year, MNSTAR has been on the upswing. In 2010, sales increased by 91 percent over 2009, and in 2011, sales were up again by almost 42 percent. Despite this recent growth, they were unable to get traditional financing because of their debt ratios and past sales record.

A $1.2 million loan from CRF will enable MNSTAR to free up cash flow to help fund growth by restructuring debt into a long-term loan. The company will be able to retain 80 full time jobs – plus, they plan to double their staff in the next three years. They also expect to double their revenues in part by developing an expanded product line to attract new customers and industries.

“We never worked with the SBA before because it’s a scary process,” said Mike Rhodes, MNSTAR president and owner. “CRF helped us put our best foot forward and navigate the SBA process. Thanks to CRF, we got an offer in hand quickly and efficiently which will enable us to sustain and add jobs here in northern Minnesota.”

Post-Recession Blues

Post-Recession Blues

Companies that weathered the recession now have a new problem – refinancing debt

by Brian Burke, National SBA Lending Director

Typical post-recession scenario: ABC Company calls their bank to say that they’ve weathered the recession and they actually expect to turn a profit this year. But they’re totally stressed out about their high debt service payments. What’s to be done?

ABC Company is just one of many companies that are starting to see the light at the end of the recession tunnel. Now the biggest thing getting in the way of a full recovery is debt financing that’s sapping them dry. And ironically, their bank can’t help them, usually because of regulatory constraints.

Enter CRF. We come to the rescue in these types of situations, and now offer flexible loan programs such as the SBA 7(a) program. These programs make a huge difference in cases when it’s difficult if not impossible for companies to refinance their loans with traditional lenders.

In fact, this week, we extended a $1.2 million SBA 7(a) loan to a great mid-sized Minnesota company. They’ve got everything going for them – good credit, great prospects, loyal employees – but were still trying to emerge from the shadows of the Great Recession. While they were able to remain current on all their debts, financial difficulties from previous years resulted in a balance sheet that was improperly structured and hampered their ability to move forward, make needed changes, and grow.

With their new 10-year CRF SBA loan, they can expand, add jobs and comfortably meet all of their obligations. We’ll tell you more about them in future blogs.

Know other companies like ABC Company? Help us find other companies that need CRF’s help and together, let’s put an end to these post-recession blues.