Walking into a 125-plus-year-old commercial building with low ceilings may be uninspiring to some, but for Spencer Johnson, owner and founder of Sota Clothing, he saw his future.
What started as an idea for a graphic design project in college blossomed into the ever-popular canoe paddle mo-tif many Minnesotans are sporting these days. As the brand continued to gain awareness, having the space to keep up with the demand was a challenge. Johnson says the company had to move its operations three times in four years.
It was time to find a longer-term solution, so he explored the idea of purchasing a larger building that could not only house warehouse operations, but office space, a storefront and upstairs tenants, as well.
Johnson met with a few different lenders, but it was The SBA Guy, John Thwing, from Old National Bank that ultimately made the best partner.
Thwing has more than 30 years of banking experience, including owner-occupied commercial real estate, business acquisitions, expansions, partner buyouts, franchise and construction financing.
“I liked how upfront John was about everything,” Johnson says. “He made it less scary to do a purchase this big.”
Earlier this year, Sota Clothing purchased the Walker Building in St. Louis Park, the city’s oldest commercial building, according to the St. Louis Park Historical Society. To purchase the building, Johnson worked with Old National to get a Small Business Administration (SBA) 7(a) loan.
“There’s a common misconception that an SBA loan is for startups only,” Thwing says. “Sota Clothing is a young, but established, dynamic business that continues to grow. The 7(a) loan is a great option for a business like Sota buying real estate because it provides good flexibility.”
The 7(a) loan is appealing for businesses because it typically requires less cash from the buyer, has longer loan terms and has less process financial reporting after the purchase. SBA loans can generally finance up to 90 percent of the appraised value of the building for up to 25 years.
“The loan process was all new to us,” Johnson says. “Having the knowledge and expertise from John and being able to work with him made it all so much easier.”
Johnson acknowledges the irony of starting as an online business then going to brick and mortar, but he now sees it as an opportunity to connect with the community.
“A store was never my plan,” he says, “but now we have a place where people can come and interact with us.” Johnson says Sota plans to host events at the building, and eventually may even host workspace for other entrepreneurs — a nod to the company’s early days of gathering around a table to collaborate on ideas.
Sota will continue to do online sales and wholesales, as well as use its traveling camper at events. The storefront opened to the public in late summer.
“Spencer and his team were easy to work with and persevered through many challenges along the way,” Thwing says. “Old National is proud to be part of an exciting new chapter for this young company and this old building.”