When Hurricane Sandy barreled up the East Coast in 2012, its devastation left K. Sidrane Inc. in Freeport under four feet of water and Neil Sidrane contemplating the future of the second-generation label-printing and packaging company. One painful lesson from the storm was certain: The business could not continue to operate in the flood zone.
Over the years, Neil Sidrane, the Long Island company's owner and president, had considered moving the 66-year-old manufacturing business into larger space. But he never felt enough pressure to make it happen. "Other times, it would have been nice. This time was different," Sidrane said. "This time, I needed to make it work."
The 504 Company and K. Sidrane's longtime banking partner, Bank of America, collaborated on a $4.25 million loan that allowed the manufacturer to buy and equip a new location near their storm-damaged property, but outside the flood zone. The 22,000-square-foot building, just 15 years old, also has room to expand.
"It's beautiful," Sidrane said. The new location needed gutting and a total rehab after years of being occupied by a sheet-metal manufacturer, but the result was worth the investment. "When you walk in you say, 'Wow, this is where I want to do business."
Sidrane said the move would not have been possible without the loan through the 504 program. His company was required to contribute only 10 percent, or $425,000, of the value of the loan rather than the 20 percent required by conventional lenders. It also was able lock-in interest rates on a 20-year term.
"No question the loan was absolutely helpful. And they were nice people. They made it as painless as they possibly could for us," Sidrane said. And despite a 20-percent sales dip between 2012 and 2013 that was created when the business lost equipment and had to close temporarily after the storm, "our bank obviously had enough faith in us to make the loan."
Bank of America recognized the manufacturer's unfortunate situation as a growth opportunity.
"We were proud to partner with The 504 Company to provide a comprehensive financing package, including funds for renovations and new equipment," said Warren D. Krug, senior credit solutions specialist, Bank of America. "The move to a larger and more efficient building in the aftermath of Superstorm Sandy has positioned K. Sidrane well for future growth."
The new facility opened February 14 of this year. Year-over-year revenue is expected to jump 50 percent at the close of one full year in the new facility. K. Sidrane currently employs between 40 and 50 people, depending on production demand, and the increased volume is expected to add up to 12 new jobs.
Rob Root, vice president with The 504 Company, says K. Sidrane's long, successful history and solid management team made the company a good risk.
"The low equity requirement allowed the company to preserve capital needed to reinvest into the company to rebuild and support its projected growth. In the aftermath of Superstorm Sandy, the second-generation company has positioned itself well for the future," Root said.
K. Sidrane Inc. was started by Neil's father in an apartment in New York City on a press that the elder Sidrane built from scratch. It has evolved into a full-service manufacturer of self-adhesive labels and medical device packaging.
Neil Sidrane, owner of K. Sidrane Inc., at his new Farmingdale location
Neil Sidrane with Rob Root of The 504 Company and Warren Krug of Bank of America