FirstBank grants first SBA CAPLine
SAN JUAN – FirstBank has granted military manufacturer Pentaq Manufacturing Corp. its first working capital line of credit of $4.5 million under the CAPLine program of the U.S. Small Business Administration (SBA), which will allow the company to fulfill contracts with the Department of Defense and the U.S. Coast Guard.
It is also the first time a local bank has granted a line of credit under the CAPLine, the umbrella program under which the SBA helps small businesses meet short-term and cyclical working-capital needs.
For Pentaq Manufacturing, which has been making military uniforms and equipment for the past 13 years in Sabana Grande, the credit line will provide a stable 2017.
“This line of credit will give Pentaq, with a management team with over 20 years of experience in the sewing industry and 385 direct employer jobs, the opportunity to buy raw materials directly without having to rely on financing from suppliers. The residents of the southwest region will also benefit, as more direct and indirect jobs will be created in this industry,” Nivia Castillo, vice president of Business Banking at FirstBank, highlighted in a statement.
To be considered for the CAPLine program, Pentaq had to meet requirements established by the SBA, such as having eligible contracts and accounts payable, production capacity and/or a good accounting and financial structure. The contracts with the Department of Defense and the U.S. Coast Guard helped Pentaq meet the requirements.
“With this line of credit, the company will be able to increase its profit margin, diversify its suppliers and obtain better prices in the purchase of raw materials,” explained Ildefonso Rodríguez, vice president of the Small Business Unit at FirstBank.
Pentaq was also granted two loans. One under the SBA Express Program to cover operational costs and another under the 7(a) Loan Program for the purchase of a “highly efficient, state-of-the-art machine” for cutting materials. CAPLine requires a company’s eligibility for the 7(a) Loan Program, which guarantees a maximum of 85% of the loan up to $150,000, or 75%, from the first $150,001 to $5 million in combined debt with the SBA.
“Since its inception, Pentaq Manufacturing Corp. has been an SBA customer through various agency programs, not only by utilizing our financial products, but also by benefiting in the areas of training and technical assistance, and federal contracting,” said Yvette T. Collazo, SBA Puerto Rico and Virgin Islands district director.
“Under the latter, we have celebrated Pentaq’s many achievements, and we are proud of the jobs the company has created and the great contribution it makes to Puerto Rico’s economy on a daily basis. With this first CAPLine we approved on the island and other financing we provided together with FirstBank, we are supporting Pentaq’s fulfillment of federal contracts and continued job creation.”