Grimm Industries: A Half-Century of National Growth from Western Pennsylvania
Butch Grimm and his father created Grimm Industries, an industry-leading promotional goods company, in 1970. Today, Grimm Industries creates custom products for several of the world’s largest beverage brands – including Anheuser-Busch, MillerCoors, Yuengling, Coca-Cola and Pepsi – as well as Little Tikes, a global toy company based in Ohio. The company’s production, distribution and management takes place in three facilities near Erie, PA.
When Butch wanted to consolidate the company’s existing real estate and equipment debt to free up monthly cash flow and bid competitively on large national contracts, he turned to his bank and Pursuit.
With an SBA 504 refinance loan, Grimm Industries reduced its monthly payments by $30,000 – and that’s not all. Learn about this and more ways that the SBA 504 refinance program benefitted Butch and his team, including positioning Grimm Industries to take advantage of new opportunities.
Freeing up funds to ease cash flow
Although Grimm Industries has a track record of success, when a business carries significant debt it can be difficult to meet the lending criteria and debt ratios that most commercial banks require. That’s when partnering with an alternative lender like Pursuit can make all the difference.
Working with Grimm Industries’ commercial bank, the business refinanced several million dollars in real estate and equipment debt and received a $1 million cash-out for working capital, based on the company’s existing equity.
As Butch explains, “The overall project was complicated because of the different loans and multiple properties, but our bank and Pursuit helped us through it. We received funding from our bank first, then received the loan from Pursuit in August. And the funding couldn’t have come through at a better time.”
He continues, saying, “We were able to amortize our loans over 25 years, instead of the typical 10 years that you get with commercial mortgages, and that alone significantly reduced our monthly payments on the loans. In addition, we got a great interest rate and because it’s fixed, our payments won’t increase over time. That gives us both stability now and the ability to more effectively plan as we look ahead.”
Leveraging new opportunities
Like many businesses, Grimm Industries was initially hit hard by the COVID-19 business closures. “Our major accounts are alcoholic-beverage producers like Anheuser-Busch and Yuengling,” Butch explains, “and we normally do a significant part of our business creating signage and promotional products for restaurants, bars and sports venues. All of those shut down for months, many are still closed and some will likely never reopen. It’s been an incredible hit, not just for our business, but because we know the people behind our client list and we know it’s been hard for them, too.”
“About forty percent of our business is with the alcoholic-beverage industry and another forty percent is the toy industry,” says Butch. “The rest comes from miscellaneous projects that we pick up. With the pandemic, though, work that we could typically count on – like producing cups for music festivals and other special events – just evaporated. And because the restaurants and bars were closed, our beverage clients didn’t need the promotional materials that they’d regularly order.”
Still, some new and unexpected opportunities emerged.
Butch continues, saying, “Fortunately for us, Anheuser-Busch started making hand sanitizer from their alcohol and they contracted with us for $1 million in sanitizer dispensers to distribute to bars and restaurants. And another major client is Little Tikes toys – and with the kids home all the time, the toy business has really picked up, because parents are trying everything to keep the kids entertained. So, not discounting the challenges all around with the pandemic, we were lucky in that we had good relationships with our existing clients and that’s helped carry us through this.”
“Right now, one of the biggest challenges is getting enough employees in place to keep up with the demand from our clients,” Butch admits. “We’re at pre-pandemic levels with around 175 employees, but we could use more. And it’s competitive around here, too, lots of companies are hiring. But at least we’re well-positioned with both opportunities and funding, so we can keep looking forward.”
Butch also says that sales and revenue are about even with last year, despite the pandemic. “But it’s really too soon to say where we’ll end up,” he says. “Our toy business should stay strong because we’ve got the holiday season coming up, but for the food-and-beverage industry, it’s just too soon to tell.”
“We recently got some new business, too,” Butch continues, “developing new product lines for 70 major colleges across the country and for the National Hockey League and the National Basketball Association.”
Given this, it seems that all signs point to continued success for Grimm Industries.
Talk to Pursuit about ways we can help your business
“Refinancing with an SBA 504 loan made a huge difference in our cash flow, reducing our monthly payments by $30,000,” says Butch. “We got a great interest rate and repayment terms that make it much easier to focus on reinvestment, too. And because we had significant working capital on hand, we were much more competitive when we bid for the licensed-products contracts. It worked out really well, strengthening our position and helping us grow.”
To learn more about how we can help you, contact us today.