ValueXpress obtained a $4.5-million first-mortgage loan commitment with its Mississippi banking partner, Guaranty Bank and Trust Company, from the SBA for a beverage distribution company located in Batesville, MS. The property securing the loan is a 1-story 59,500-square-foot industrial warehouse/distribution building constructed in 2000 on a 22.65-acre site in Batesville, MS and a 5,600-square-foot maintenance building. The main facility is a 3-section building consisting of a 9,500-square-foot office complex with a lobby, gift shop, administrative and executive offices, training and conference room, and storage rooms. The center section is a 20,000-square-foot delivery truck staging area with a ceiling height of 27 feet and overhead glycol piping utilized to keep truck cargo cold. The warehouse is 30,000 square feet and climate controlled with a ceiling height of 22/27 feet. The facility was constructed at a cost of over $6.5 million in 2000. The property is in excellent condition and is located within a half-mile of I-55, enabling trucks to quickly travel to distribution points within the company’s market.
“The project is an example of lender perseverance,” commented Jay Bhakta, a senior loan originator with ValuXpress who is located in its Jackson, MS office. “We originally underwrote and submitted the loan as a USDA Business and Industry (B&I) guaranteed loan application, but after significant passage of time, the USDA ruled that the cash price paid for the distribution rights (in excess of $1 million) for a major beverage product was an “intangible” asset and did not qualify for inclusion as an asset for the 10% tangible net worth calculation for the USDA B&I program,” said Bhakta. The client was devastated by the ruling as it did not meet the program guidelines once the distribution rights were removed from the calculation. “I was watching the progress of the potential increase for the 7(a) program in the meantime,” noted Bhakta. “Once it was approved, I went back to the client and orchestrated a re-underwriting and switch to the SBA 7(a) program and submitted the loan in the first week applications at the higher level were accepted. Now the client is thrilled, as the USDA fee would have been 2%, and the SBA fee is zero.”