California isn’t just a place to live, it’s a lifestyle. No one knows that better than Nick Hoppe, founder of Ocean Beach Sportswear. Operating his business since 2013 out of San Francisco and Richmond, he’s helped hundreds of organizations embody the spirit of their brand with quality custom-printed apparel.
The business also serves top retail customers, including Only in San Francisco at Pier 39, District MARKET at San Francisco International Airport, ‘Welcome to Las Vegas’ shops and Forever 21. They make branded apparel for iconic San Francisco businesses such as Blazing Saddles.
In November 2017, Ocean Beach Sportswear attracted plenty of attention from the local business press for its big moves. “We are at the hardest part,” said Vice President Brett Hoppe, Nick Hoppe’s son. What was the challenge? Shifting from a small business to a medium-sized one across the Golden State.
Scaling can be challenging, but TMC Financing was there to help.
TMC Financing was “The Perfect Fit” for a Fast-Growing Apparel Company
Ocean Beach Sportswear has done some fantastic things over the last few years. Starting with just a single retail store, it now has 30 locations across California and a host of pop-up retail locations customers can visit from October through January.
Lack of space, however, was proving to be a significant obstacle.
With Ocean Beach growing by leaps and bounds and Hoppe’s son Brett entering the business, more warehouse space was imperative. Brett Hoppe wanted to fold his wholesaling business into the Ocean Beach portfolio and stop paying an outrageous $1 per square foot for 20,000 square feet in Richmond.
A collaboration was the best move for both sides – now they needed funding to make an acquisition happen.
Nick Hoppe learned of TMC Financing and the SBA 504 loan program through his business bank, Bank of America. They suggested he reach out to Bruce Whitaker from TMC Financing. Bruce is TMC’s Senior Vice President of Business Development and a top 504 lender in the South Bay.
Nick Hoppe, owner Ocean Beach Sportswear “It was really a pleasure to work with Bruce,” Nick Hoppe recalls. “We made a great team, the two of us.”
For his part, Whitaker raved about Ocean Beach. “Their operation is impressive, and they are growing like crazy,” he says. “I was confident the SBA 504 loan program was the right vehicle to reach their growth goals sooner.”
The SBA 504 Loan Program Helped Ocean Beach Find a Space It Wouldn’t Outgrow
With Whitaker’s help, Hoppe used the SBA 504 loan program to buy nearly 70,000 square feet of space in Fairfield. A low 10 percent down payment and 25-year fixed interest rate made the $5,750,000 transaction very attractive. In just a few weeks, the deal was finalized.
With the SBA 504 loan program, business owners can buy commercial real estate and other fixed assets at below-market, long-term fixed interest rates. The loans are fully amortized over 25 years and carry no balloon payment. Down payments are as low as 10 percent, and there is no limit to the total project cost.
“Buying property for the business is something I’ve always wanted to do,” Hoppe tells us. “It’s not easy, you need a lot of cash to do it, and I prefer to put cash back into the business. The low down payment of the 504 loan put ownership in reach.”
Luckily, Hoppe says, he had the right team on his side. TMC Financing accelerated the process and made sure Ocean Beach was in a position to make the purchase Hoppe wanted. In the process, he was very impressed.
“If I could give more than five stars, I would. They were just so competent and so thorough and so approachable. They responded immediately to any questions we had.”
TMC Financing Can Help Your Business Succeed with an SBA 504 Loan
How does Hoppe feel about being his own landlord?
“Delightful!” he says with a grin. “Being your own landlord is the best. I recommend it highly. You have to maintain the buildings and all that, but that’s a small price to pay for not having to deal with leases.”
Ocean Beach is looking forward to a busy holiday season with its much more cost-effective approach to storing inventory. It’s time to roll out the annual pop-up store strategy, opening 20 stores in just 25 days. Ocean Beach apparel will be available throughout California and in Seattle.
One of the top customer favorites? Branded novelty socks, Hoppe admits.
With no additional collateral required and “soft costs” like closing fees eligible for the financing package, the SBA 504 is a flexible option for small to medium-sized businesses. Nearly all for-profit companies are qualified.