Marie Johns, the outgoing deputy administrator at the Small Business Administration, went on a kind of farewell tour last week, stopping by seven workplaces in the District that have been beneficiaries of SBA loans and other resources.
Here’s a look at the small businesses Johns visited:
Willy Armstrong has been producing custom signs, T-shirts, awnings and neon signs in D.C. for 25 years. He took out a $15,000 loan in 2002 to buy more digital printing equipment. Before he started acquiring technology, he drew the signs by hand — now, he has a special printer for banners, which cost him around $22,000.
Armstrong operates in Southwest D.C. with two employees. Other than taking a few interns from the University of the District of Columbia, he’s happy to keep his operation small.
Sebastian Phillips runs a 14-person design firm whose main clients include the Marine Corps and the Naval Sea Systems Command. His team is developing a prototype for a water filtration system for the Marine Corps, which would transform “greywater” — a classification between clean drinking water and sewage — into potable drinking water. The system aims to reduce the amount of clean water a crew would need to bring on board a ship.
It’s difficult for a small design business to compete with larger firms for contracts, Phillips said. “In order to compete, you have to grow, and it’s expensive to grow. You have to have a large amount of operating capital to win a contract,” he said. “Especially when you’re working the government, it’ll be a long time before you get paid.”
To supplement the firm’s cash flow, Phillips took out two $250,000 SBA-backed loans in 2010 and 2012.
In addition to loans, the firm relies on awards from the Small Business Innovation Research Program.
Former D.C. police officer Loren Copsey and his wife, Beth Rogers, opened a bike shop last year in Northeast D.C., a few blocks from their home.
Daily Rider targets so-called transportation bikers — people interested in transitioning to bikes from cars for their daily commutes. It sells bikes and accessories, does repairs and hosts repair classes. The couple used a $44,000 loan to buy a space on H Street NE, which had been abandoned for decades, Copsey said.
Copsey said he finds the business’s space limitations particularly challenging. “We’re at capacity for traffic,” he said, both in terms of customers who can comfortably fit in the store at once, but also in the number of employees. He added that it’s difficult to find good mechanics, especially during the spring rush, when more customers are bringing in their bikes for tuneups. “Bike mechanics [require] a specific type of skill.”
“We wanted to buy it because somebody would have bought it and taken it from us,” Hiltunen said. “We didn’t have any choice but to buy it.”
So the two took out a loan for more than $1 million in 2010, which helped them purchase the building where they had already installed a Japanese “noh” stage, built specifically for a style of Japanese therapeutic musical drama.
But funding for treatment programs such as ADTI is becoming scarce, Hiltunen said. While loans were helpful in securing the building, “our focus now is on the program and maintaining it. We have to find funding for services, and a loan wouldn’t help that.”
Since opening the first Peregrine Espresso coffee shop on Capitol Hill in 2008, Ryan Jensen and his wife have expanded to three locations, the most recent opened in Northeast’s Union Market. The deputy visited their second location, on 14th Street Northwest, for which the couple took out a $165,000 SBA-backed loan in 2010.
Jensen used the loan to transform the space, which used to belong to a flower shop, into a coffee shop, a process taking almost a year. Jensen said he hopes to expand to more locations in the District, but slowly. “I’m sort of scouting for the next community we fit in.”
Diane Gross and her husband operate Cork Market on 14th Street NW, a specialty wine, cheese and grocery store across the street from Cork Wine Bar, their wine bar and restaurant.
Gross said she likes to buy wines, cheese and meats from other small-business owners like herself. The store specializes in small estate wines, “meaning the person growing the grapes is making the wine,” Gross said, but added, “Unfortunately sometimes we run out of wine because of it.”
They took out a $546,000 loan in 2009 to purchase and renovate the space for the market, installing a special humidity-controlled room for wine storage, and clearing a room upstairs for events such as wine tastings.
Bill Fuchs bought Wagshal’s — a delicatessen and specialty grocery store with an 80-year history in the District — from owner Ben Wagshal in 1990, using a $775,000 loan to make the purchase.
“When you buy Wagshal’s, what are you buying? Goodwill? A brand? You don’t have a lot of tangible assets .. .banks are looking for collateral,” Fuchs said, nothing that he put up his residence as collateral.
Since then, Fuchs has grown Wagshal’s to three locations, including the newest deli, on New Mexico Avenue NW.