Trav’s Outfitter

Watertown, SD

Trav’s Outfitter Incorporated, located in Watertown, South Dakota, is one of

First District Development Company’s most recent clients to take advantage

of a low, fixed interest rate SBA 504 loan. The 504 loan, in conjunction with

a conventional loan offered by American Bank & Trust in Sioux Falls,

provided Trav’s Outfitter an attractive financing package featuring

manageable debt repayment requirements, which in turn put an ease on their

cash flow. Loan proceeds from the 504 and American Bank & Trust were

used to construct a new building in Watertown to house Trav’s Outfitter.

Trav’s Outfitter Incorporated is owned and operated by Travas Uthe. Travas

started working in the footwear industry on Kemp Avenue in uptown

Watertown at 15 years old. In 2003, with 18 years of clothing and footwear

retail experience under his belt, Travas decided to open Trav’s Outfitter in

Watertown. The humble beginnings of Trav’s Outfitter included

warehousing and selling out of his home garage.

(continued on page 2)

Inside This Issue...

Volume 23 / Summer 2019

FEATURE 504:

SBA 504 - The Money That Makes America Work - SBA 504

Featuring — Trav’s Outfitter

FDDC Awarded District Leadership Award

SBA 504 Debt Refinance Program

504 Latest Interest Rates

124 1st Avenue NW, P.O. Box 1207 Watertown, SD 57201

Phone: (605) 882-5115 FAX: (605) 882-5049 E-Mail: paula@1stdistrict.org amy@1stdistrict.org shelby@1stdistrict.org andrea@1stdistrict.org

Website: http://fddc.1stdistrict.org

Paula Hulscher, Exec. Vice President Amy Waite, Loan Officer

Shelby Kraemer, Loan Officer Andrea Tesch, Assistant Loan Officer

FDDC is an Equal Opportunity Lender, Provider, and Employer.

First District Development Company Page 2

Trav’s Outfitter Continued

FDDC Awarded

2018 District Leadership Award

At the Small Business Week Celebration held in May, 2019, First

District Development Company (FDDC) was awarded the 2018

District Leadership Award as 504 Dollar Leader by the South

Dakota Small Business Administration for the amount of SBA

financing secured on behalf of small businesses in 2018. (Pictured

below: Andrea Tesch and Paula Hulscher, both of FDDC; Jaime Wood,

SD SBA District Director; Amy Waite and Shelby Kraemer, both of

FDDC.)

Derek DeGeest of DeGeest Steel Works Co, was honored as the 2019

South Dakota Small Business Person of the Year. Derek is President

of DeGeest Steel Works Co in Tea, South Dakota, a third generation

full-service metal fabricator. FDDC has assisted DeGeest Steel

Works Co with two SBA 504 loans for the expansion of their

business. (Pictured above: Glenyce DeGeest, Matthew DeGeest, Alicia

DeGeest, Derek DeGeest, Jaime Wood – SD SBA District Director, Sandra

DeGeest, and Scott DeGeest)

From there, Trav’s Outfitter moved to a 4,000 square foot building on

Highway 20 in Watertown that he shared with a pizza and sub shop for a

short time. Over the years, Travas has had to adapt to the ever changing

retail landscape in order to deliver the service Trav’s customers expect. One

thing has remained the same—Travas’s commitment to integrity and

customer service, which he trains staff on daily. Travas appreciates the

value of hard work and understands the worth of every single customer.

These values, along with a team of high quality management and staff, have

fueled Trav’s Outfitter’s growth. As the store on Highway 20 was busting at

the seams with inventory, it was time for Trav’s Outfitter to relocate. In

2018, the store moved to a newly constructed 28,000 square foot store

located on west Highway 212. Their new building not only allows them to

carry a larger variety of inventory, but also includes indoor space to store

the mobile trucks. The trucks and staff who load and unload the mobile

units especially appreciate this feature during the cold winter months.

Trav’s Outfitter has something for everyone including work shoes for every

environment, a full array of western boots, athletic shoes, hunting and biker

boots and gear, jeans, shirts, hats, jewelry, and more. In addition to the store

in Watertown, Trav’s Outfitter also uses mobile units to bring their quality

shoes to factories and jobsites in North Dakota, South Dakota, and

Minnesota.

Congratulations to Travas Uthe with the successful relocation of his

business!

First District Development Company Page 3

SBA 504 Refinance with Expansion

Existing debt of up to 50% of the expansion costs

(construction, professional fees, interim interest) can

be included in the 504 project

Business must be in operation at least 1 year

Existing debt has to be for fixed assets or only use

portion of debt that was for fixed assets

Business must be current on payments for 1 year

Existing debt can be less than 2 years old

Can refinance SBA 504/SBA 7a/Third Party Lender

Loans made with an SBA 504 project

Refinance must provide a substantial benefit to the

business – a savings of at least 10% or refinancing a

balloon payment is automatically considered a

substantial benefit

Refinance must provide better terms or interest rate

(Examples: longer maturity, lower interest rate,

improved collateral conditions, less restrictive loan

covenants)

Equity in land & building can be used to meet 504

equity requirements

Excess debt that exceeds 50% of the cost of expansion can be consolidated into the Third Party Lender Loan as long as

the debt was secured by the project property

SBA 504 Debt Refinancing Program (Refinance Only)

Only existing debt (no expansion costs) can be included in the 504 project

Qualified debt must be at least 2 years old and used to

acquire an eligible fixed asset

Business must be current on payments for 1 year

Cannot refinance SBA 504/SBA 7a/USDA or Private

Lender Loans made with SBA 504

Refinance only projects maximum loan-to-value is

90%

Cash-out refinance is permitted to cover most eligible

business operating expenses

Business operating expenses include salaries, rent,

utilities, inventory, or other business obligations

incurred but not paid or will become due in next 18

months

When business operating expenses are included, the

maximum loan-to-value is 85% and operating

expenses cannot exceed 20% of value

Must meet all other eligibility requirements of SBA

504 program

504 Refinance with Expansion

SBA 504 project sources and uses example –

debt refinancing with expansion:

Expansion Costs $500,000

Qualified Debt Refinancing $250,000 Total Project Costs $750,000

Lender 50% $375,000

FDDC / SBA 504 40% $300,000

Equity 10% $75,000 Total Financing Sources $750,000

504 Refinance Only

SBA 504 project sources and uses example – debt refinancing with business operating expenses:

Appraised Value of Property $1,000,000

Qualified Debt $500,000

Qualified Debt $200,000

Business Operating Expenses $50,000 Total Project Costs $750,000

Lender 37.5% $375,000

FDDC / SBA 504 37.5% $375,000

Equity 25.0% $250,000 Total Financing Sources $1,000,000

Refinance and Take Advantage of Low Rates Guidelines Vary on 504 Refinance With or Without Expansion

For more details, contact First District to discuss your refinance project and

its SBA 504 eligibility...605-882-5115.

First District Development Company Page 4

For July 2019, a total of $170,991,000 twenty-year

debentures (or 220 loans) , a total of $151,285,000

twenty-five year debentures (or 219 loans), and

$11,268,000 ten-year debentures (or 22 loans) were

funded through the sale of certificates guaranteed by

SBA.

Rates shown are full term effective rates, which

include all monthly service fees. 10-Year

Debentures are sold every other month and generally

the proceeds are used for equipment purchases. 20-

Year and 25-Year Debentures are sold monthly and

the proceeds are used for real estate acquisition and/

or construction.

504 Funding Summary July 2018 — July 2019

Be FIRST to get it FIXED!

10-Year Debentures

Jul 2018 5.302

Sep 2018 5.252

Nov 2018 5.590

Jan 2019 5.064

Mar 2019 4.628

May 2019 4.365

Jul 2019 3.937

25-Year Debentures

Feb 2019 4.771

Mar 2019 4.741

Apr 2019 4.532

May 2019 4.391

Jun 2019 4.090

Jul 2019 4.011

20-Year Debentures

Jul 2018 5.259

Aug 2018 5.301

Sep 2018 5.250

Oct 2018 5.492

Nov 2018 5.591

Dec 2018 4.926

Jan 2019 4.758

Feb 2019 4.646

Mar 2019 4.586

Apr 2019 4.367

May 2019 4.265

Jun 2019 3.983

Jul 2019 3.914

124 1st Avenue NW, P.O. Box 1207 Watertown, SD 57201