After years of operating in crowded manufacturing space, John Lutjen committed to buying a larger building from which to run his established machine shop, Jolin Machining Corp. The 504 Company and Suffolk County National Bank provided Lutjen with the funding he needed to buy and equip a larger building just one block away.
The $1.3 million loan was used to purchase, renovate and equip the new property, and pay for moving, rigging and other associated soft costs. The building, a former clear-span warehouse, required more than $77,000 in masonry and electrical work to convert it for Jolin's operations.
Manufacturing space almost doubled, to 11,000 square feet from 6,000 square feet, allowing for a more efficient operation. That efficiency, coupled with some new equipment, will help the manufacturer increase year-over-year sales by as much as 10 percent in 2014.
Lutjen initially approached traditional lenders, but the advantages of The 504 Company's program were clear: He was required to contribute only 10 percent equity, versus the 20 percent required by private institutions. He was also able to lock in an interest rate for 20 years.
"Some of the other lenders I talked with wanted a balloon payment after 10 years, or they wanted to increase my interest rate after 10 years. From that standpoint alone, the 504 was a good loan," Lutjen said. Jolin Machining, located in Bohemia, a hamlet in the town of Islip along the south shore of Long Island in Suffolk County, is a machining and milling business that makes everything from handles for cabinets, to housing and bracketry for electronic devices.
Richard Amsterdam, vice president with The 504 Company, recognized Jolin's need for larger space during his first tour of the cramped property.
"The 504 made perfect sense. We were able to provide the long-term, fixed-rate financing the principal sought, while being able to include the equipment-specific renovations, moving and rigging expenses relating to the breakdown, set up and calibration of all their equipment," he said.
Lutjen added one employee since the move was completed in April 2013, increasing staff to 13. He plans to add two more employees once some new equipment is installed. That new equipment will allow his company to diversify its offerings and increase production once again.
Suffolk County National Bank based its lending decision on its longstanding relationship with Lutjen, and the company's stellar reputation in its industry.
"Jolin Machining Corp. is a great example of a local family business competing against giant international companies and succeeding by manufacturing products that are of superior quality and delivering them on time," said Ben Mancuso, the bank's senior vice president of lending. "The company has built a loyal customer base by building strong relationships and providing superior service."
Lutjen, who founded Jolin Machining Corp. in 1978, said that the efficiency created by the extra space and layout of the new building has already covered the costs associated with the move.
Pictured Left to Right: Rich Amsterdam of NYBDC, Stephen Lutjen, John Lutjen and John Lutjen Jr. of Jolin Machining and Ben Mancuso of Suffolk County National Bank