Mary and Thomas Stafford opened their Blo Blow Dry Bar on May 6 of this year. Months earlier, they wondered if their hair-styling salon would open at all.
The Staffords had invested $300,000 of their own money to open a Blo Blow Dry Bar franchise in Manhattan's wealthy Chelsea neighborhood, but lacked the capital to furnish and equip the specialty salon.
Enter Bank of America and Empire State CDC: The 504 Company, or what Mary refers to as the couple's "lifesavers."
"We were liquidating assets and looking under seat cushions. This business never would have happened without Bank of America and The 504 Company. Without pulling in a private investor, which we didn't want to do, their participation was crucial for us," Mary Stafford said.
Bank of America and The 504 Company partnered in a $131,900 loan package that the couple used for equipment and furniture, and for working capital.
Lending partnerships such as this one are essential to startups and small businesses that lack assets and otherwise could not obtain funding from private institutions.
"The borrowers didn't qualify for traditional financing due to the start-up nature of the business," said Christina Lopez, The 504 Company assistant vice president. "The Community Advantage loan program, which targets newly formed businesses, was an excellent fit and provided the funds needed for working capital and equipment purchases."
Longstanding relationships between lenders provide even greater opportunities for borrowers. Bank of America's Joseph DeOrio has referred businesses to Lopez for three years. Those deals, including two through the Community Advantage program, created 24 jobs and generated more than $350,000 in loans.
"As a leading investor in community development financial institutions, we – like The 504 Company – recognize the positive impact these local loan centers have in reaching more borrowers, including those who may not qualify for a traditional loan," said DeOrio, small business banker with Bank of America. "We are always looking for innovative ways to support small business owners and strengthen the economies of local communities, and we see our collaboration with The 504 Company as in-dispensable to that effort."
The Staffords' solid business backgrounds also strengthened their loan application, Lopez said. Mary, who has a law degree from Loyola University, held several administrative positions before opening the Blo Blow Dry franchise. Thomas, a serial entrepreneur, is CEO of DRC Emergency Services LLC, a disaster-response company he started in 2005 and later sold.
Mary and Thomas found Blo Blow Dry Bar's business model attractive because its specialty salons provide only wash, blow-drying and styling services. They do not offer cut, coloring and other services that typically take more of a stylist's time, and that translates to shorter waits for customers.
The Staffords' Blo Blow Dry Bar has 25 people on staff, and that number should grow quickly. First-year revenue is expected to reach $750,000.
Mary Stafford praised DeOrio and Lopez for a smooth application process, and for having the necessary connections.
"I've never seen a network like the one that Joe has. After he pitched the ball, Christina took over seamlessly," Mary said. "I can't say enough about how helpful they were."
Pictured Below: Joe DeOrio of Bank of America, Mary and Thomas Stafford of Blo Blow Dry Bar and Christina Lopez of NYBDC