Freeman Schwabe Machinery management used SBA loans to buy, then expand the business

The Freeman Co. was a manufacturer and distributor of industrial die-cutting machinery, a company founded in 1892. When the firm decided to shed its manufacturing division, CEO Greg DeFisher was interested in buying it. A combination of two different Small Business Administration loan programs allowed DeFisher to first buy the business, and then, when growth demanded a larger location, buy a larger facility.

In late 2006, DeFisher and others completed a management-led buyout of the Freeman Co., renaming it Freeman Schwabe Machinery (the firm had purchased the Herman Schwabe Co. out of bankruptcy in 2002.) DeFisher’s purchase of the business was made possible by financing from National City, where he worked with Jay Wuest, and the Small Business Administration’s 7(a) guaranty loan program.

Fast-forward to today, with Freeman Schwabe experiencing growth of 100 percent in 2007 and 35 percent in 2008. That rapid growth, combined with an expiring lease, meant the company needed to move. DeFisher again turned to the Small Business Administration’s lending options, this time the 504 program, working again with National City, the Horizon Certified Development Co. and Loan Officer Mike Crowe to obtain the financing needed to purchase a new, 30,000 square foot facility for his expanding business.

Freeman Schwabe manufactures machinery for the industrial die-cutting and plastic-card industries and provides parts and service for more than 12,000 of its machines around the world. The magnetic strips on the back of the Ohio drivers’ licenses, for example, are put on by a Freeman Schwabe machine, and the company is a global leader in providing die-cutting machinery for automotive interior fabrics.

DeFisher’s company is expanding its international sales, as he is currently establishing a market in China and is pursuing contracts in Western Europe. The company has grown from 13 to 20 employees.

He says the ease of the loan program, and its terms, were crucial in allowing him to purchase the business. “I wouldn’t be in business today if it wasn’t for the SBA loan,” he says. “The terms are very attractive for small businesses.”

The SBA lending programs offer low, fixed-rate financing for small businesses that create or retain jobs and help improve or stabilize the local economy. For manufacturing firms such as Freeman Schwabe, the SBA lending limit is increased to $4 million.

Freeman Schwabe’s story is an example of how the loan officers at HCDC work in partnership with banks to build financing solutions that help businesses grow. For more information about financing programs offered by SBA through the Hamilton County Development Co., please contact HCDC’s Mike Crowe at 513-631-8292, or by e-mail at mcrowe@hcdc.com.