Tim Prukop already was thinking about how to build 1Up Sports Performance’s long-term success when he and co-owner Blake Gould opened the doors for business in April 2012. Now thanks to TxCDC’s assistance, this Austin business will reach another important milestone by the end of the year – a custom facility.
1Up Sports Performance, which uses mental, physical and visual techniques to help elite athletes boost their performance, initially began in a leased space and already has numerous success stories. For instance, linebacker Jerrell Freeman hired 1Up Sports Performance to help him improve his speed and explosiveness. After working with Gould, who is a master trainer, Freeman joined the Indianapolis Colts and is now one of the National Football League’s leading tacklers.
Because of these initial successes, the owners felt the timing was right to develop and own a larger state-of-the-art facility so they can triple the number of clients they serve. However, 1Up Sports faced some hurdles in getting loan approval for the new facility from their banker. “Because 1 Up Sports was a start-up and the package was very preliminary, Wells Fargo was not willing to fund the real estate loan without also funding a start-up loan for operations,” explained Kara Pinnelli, a Wells Fargo banker. That didn’t meet the borrower’s needs.
After hearing Wells Fargo’s decision, Prukop decided to see what other options were open to him to fund the new custom facility, which includes cutting-edge equipment and an outdoor workout area. “We interviewed several different lending institutions,” Prukop explained. “My father-in-law, who is a banker in Missouri, recommended looking into getting the SBA 504 because there were some favorable rates and some favorable down-payment options. We also wanted to have the option to begin to work with the SBA because the plan is to build a couple more 1Up Sports Performance facilities over the next few years.”
That’s when TxCDC came into the picture. “Tim was easy to work with, he had a well thought-out business plan, experience, was organized and really only needed help putting together the financing package for his permanent location,” said TxCDC President Suzanna Caballero. The total project cost of this loan package was $520,000, which included land, the new building and equipment. As owners of a new business, Prukop and Gould were responsible for 15 percent of the equity to complete the project. Wells Fargo served as the lender by providing 50 percent of the costs while the SBA 504 loan provided 35 percent.
Prukop especially appreciated how TxCDC’s staff streamlined the loan process. “I thought that Texas Certified had everything well organized,” he said. “When I got a chance to sit down with Suzanna, I felt like she understood our business and what we were trying to accomplish, she made up her mind that she was going to help us get this done. So every step of the way – and this is the first time I’ve been through this process – TxCDC had all the information for us, they put all the files together, and they were very conscientious to make sure we had all the information correct. It’s just been really easy to work with them because I felt they had our interests at heart.”
Understanding the time constraints of a new business owner, Caballero and her staff did everything in their power to facilitate the process. “TxCDC worked together Wells Fargo to limit the time Tim was involved on the loan application so he could focus on his start-up in its temporary location,” Caballero explained. “Because he was working with a contractor for his build-to-suit location, Tim did not have to arrange for interim construction funding, which also allowed him to focus on marketing, new client acquisition and working out the kinks of his new business. Tim’s business is up and running and will be a high performance business very soon.”
The best part of this loan process was that everyone walked away a winner. “It has been a win-win for both the client and Wells Fargo,” Pinnelli said. “Texas Certified helped Tim put his financial package together in a way that showed us his ability to fund both the purchase of his building and cash for operations. Without their help, I truly believe this loan would have been declined.”
The Wells Fargo banker also has found a partner in helping her better serve her clients. “I have come to realize that if I believe there is an SBA loan opportunity for a business owner, I can send the client to Texas Certified and they will make it happen,” she said.
by Dorian Martin