Loans Played No Small Part in Firm’s Rise

Bob Simpson credits a Small Business Administration loan with giving his San Diego-based building supply company “the capital that allowed us to compete with the big boys--and now we’re one of the big boys ourselves.”

In 1981, Simpson was Western Wall Systems’ sole employee, and the company was operating out of his garage. Today, Western Wall has 24 employees and has won several large contracts to handle improvements at some of the city’s largest office buildings.

“It’s hard to make a small company grow if you don’t have the capital,” said Simpson, whose firm was unable to buy a key piece of equipment in 1984.

“The problem is that most banks are willing to deal with you when all you need is a $20,000 line of credit,” Simpson said. “But, when you grow, and your (capital) needs grow, they aren’t willing to take a chance on you anymore.”

Western Wall has used SBA loans arranged by Bank of Commerce to purchase a laminating machine, a computer system and various pieces of equipment. Together, those acquisitions “gave us the ability to take on bigger jobs,” Simpson said. “Five years ago, we couldn’t have handled the size of jobs we’re doing now.”

Simpson bristles at the suggestion that government-backed loans are unlikely to be paid back. When Western Wall recently took out a $300,000 SBA loan, the agency required that he back up the loan with a $300,000 life-insurance policy and a second trust deed on his house.

The agency also extracted a personal guarantee from Simpson and his wife.

“They had me coming and going,” Simpson said. “This is a government program, but the loans get paid back. They make sure of that.”

SBA loans also helped San Marcos-based Signs & Glassworks expand from a garage operation to a booming business with 55 employees.

‘Allowed Us to Grow’

Signs & Glassworks founder and Vice President bLarry Longobardi credits an initial SBA loan handled by Bank of Commerce during the early 1980s with “getting us out of a garage and into a building. It allowed us to grow.”

Growth seemed unlikely during the early 1980s, however, when Longobardi and co-founder and President Doug Lovison approached large lending institutions for a loan.

“It got pretty ridiculous,” Longobardi said. “My father had been guaranteeing loans for us, but when we needed a bigger loan to get equipment and working capital, it became obvious that it wouldn’t work out.”

At the time, Signs & Glassworks had a $600,000 order from Miller Brewing Co. for decorative items used by retailers to advertise Miller’s products. Despite the order, bankers were unimpressed.

“They told us to stick to the swap meets,” Longobardi said. “They really had a bad attitude about dealing with a small company.”

Longobardi, who feared that an SBA loan would entangle his company in paper work, was pleasantly surprised.

“They handled it all and it was relatively painless,” Longobardi said. “Growth would never had happened if we had tried for a straight loan.”