Kripke structures financing for expansion

SBA 504 loan part of funding approach

Kripke Enterprises, Inc. places high importance on relationships with customers, suppliers, and employees. Similarly, its relationships with area financial institutions are described as partners. The company is initiating a major expansion and its funding partners are playing an important role.

Kripke, a non-ferrous scrap brokerage business specializing mainly in aluminum, is investing $8.5 million in its new 223,000 square foot facility in Sylvania Township at 8201 West Central Avenue. According to Matt Kripke, president of Kripke Enterprises, the project requires a range of repairs and renovations and includes the installation of office space, as this building will serve as the company’s headquarters. Kripke also noted that it will be utilizing approximately 125,000 square feet of the building and the company intends to lease out the 98,000 square feet of remaining space.

According to Kripke, the facility will also be fitted with a new truck scale, LED lighting, new windows, and a new air handling system. The company is also looking into replacing the roof, which is expected to be a three-year project.

“The building is a 50-year old structure and it requires a fair amount of repairs and renovation before we move in, but we are very excited about the space. Our current warehouse here in Toledo – currently on Hill Avenue – is about 45,000 square feet of warehouse space and we’ve run out of space,” said Kripke. “We’ve outgrown both of the offices in our current space, sometimes even having two or three people sharing offices that were meant for one person. We also have outgrown our warehouse insofar as we are turning away opportunities because we don’t have the physical space to store or process as much material as being offered to us.”

According to Kripke, the company looked into different facilities in Toledo, as well as outside the state, but made the decision to choose this location.

“We didn’t want to go too far away because the majority of our employees live near here. It just so happened that this facility – it’s too big for what we need – but we like the idea that eventually we can grow into it and use the rest of it. The majority of the facilities we looked at were big enough for what we need in Toledo, but were either in an area that was not going to work well for us physically, or it was in an area with kind of a lack of highway, or it didn’t have enough truck docks because we load and unload vans, mainly,” said Kripke. “Another thing we found is that there are plenty of places in Toledo that have warehouse space and plenty of office space in Toledo, but to find warehouse space with sufficient office space is unique. This was one of three or four buildings within a four-year search that met our needs. It’s actually either the largest or second-largest facility in the Sylvania area, which is pretty unique.”

When speaking of the company’s growth and success, Kripke said, “We attribute our growth to the acquisition of our coil division. The people that we buy the coil from are the same people that we sell the scrap to. We can go in, supply them with scrap, pay them a fee, and take out coil. It helps with their cash flow and they allow us to make a little bit of an extra margin so it’s a win-win for everyone.

“In addition, we follow our three core principles. First, we do what we say – which sounds so elementary – but when we promise someone something, we make sure we follow through on it. That means paying our bills on time, that means picking up when we say we’re going to, and we deliver when we say we’re going to. It sounds very basic, but it’s very important to people within the industry. Secondly, we provide solutions. Instead of calling people and saying that they’ve got a problem with your material, we try to call them and offer them options, because oftentimes they do have the ability to work directly with the places that we are selling to, but they like to work with us and sell through us because they know we are going to make it easy for them by providing those solutions if things don’t go exactly right. The third thing is relationships are the backbone of our business and we work hard on fostering relationships with our employees and with our customers. As a family-owned business, we make sure that we are taking care of our employees and that they feel like that are a part of our family, and we try to treat our customers the same way,” said Kripke.

Kripke also noted that a lot of the company’s success is based on its banking partners.

“We really do have some great banking partners. We have two banking partners on the current business model, which is Signature Bank and Waterford Bank. It allows us to offer much quicker terms to our customers. A lot of the people we sell to, their terms are net 35 or net 60 so that helps our customers with their cash flow,” said Kripke.

Aerial rendering of Kripke Enterprises, Inc.’s new Sylvania Township facility

On the current project, the company worked with the Toledo-Lucas County Port Authority to acquire a 504 Small Business Administration (SBA) loan, which is designed to help small businesses grow and can be used to purchase land; purchase existing buildings; purchase long-term machinery and equipment; purchase improvements (including grading, street improvements, utilities, parking lots, and landscaping); or build new facilities or modernize, renovate, or convert existing facilities. The company also received a loan through Signature Bank (the lead bank on the relationship) and The State Bank and Trust Company, headquartered in Defiance.

“This project is a great example why the Port Authority administers the US Small Business Administration’s 504 Loan Program,” said Laurie Cantrell, Toledo-Lucas County Port Authority’s finance programs manager. “Our goal is to help small businesses acquire the resources needed to expand and create new jobs.”

The company secured a grant from JobsOhio in which Kripke Enterprises has committed to creating 25 new jobs over the next three years.

“We’ve got a great team who worked on this project. We worked with JobsOhio, the Regional Growth Partnership (RGP), the Toledo-Lucas County Port Authority, as well as Signature Bank and State Bank. We really couldn’t have done it without the team coming together and helping us expand in this area,” explained Kripke.

The company made the announcement that it was moving to its new location earlier this year and is targeting a move-in date in September. Maumee-based Program Solutions Group is serving as the architect and general contractor for the project.

“We’re very excited to move into Sylvania Township and couldn’t be happier to be a part of that community,” said Kripke.

The company has been in business for 26 years, and has been at its current Hill Avenue location for the duration of that time. According to Kripke, the company is primarily in the aluminum business, although it handles some other metals as well. With this new location, Kripke noted that he expects the company to be able to double its volume through the warehouse part of the business.

“Our company started mainly in the scrap metal recycling business. We now have a division that also buys, paints, and then sells aluminum to people who use it in a manufacturing process, mainly making gutters, downspouts, signs, and a lot of different items in which they would use aluminum. The location in Sylvania will primarily be used for consolidating and processing of aluminum scrap metal,” said Kripke.

Kripke noted that its customer base is located all throughout North America. The company has customers throughout the Midwest, in California and Washington, as far south as Florida and Texas, as far east as Maine, as well as a range of Mexican and Canadian customers.

“We sell to mainly large producers of what are called semi-manufactured aluminum products. Most of the people we buy from are what I would call small- to mid-size companies and the people we sell to are often large and multinational corporations,” said Kripke.

The company has two other locations – one in Jackson, Tennessee and the other in Fort Lauderdale, Florida – and has a total of 40 employees. Of the 40 employees, 30 work in the Toledo area.