Vermont Tubbs seeks city loan
Company says funds needed to fuel growing business
Jeff Linville -- Furniture Today, December 13, 2007
BRANDON, Vt. — Vermont Tubbs is seeking $80,000 from a municipal loan fund here to help its cash flow as the business grows.
The solid-wood bedroom producer was on the verge of closing when a newly formed investment group bought it in December 2003. Today, the owners say its sales have grown at an annual rate of 5% to 7% the past three years, to an estimated $6.5 million shipped in 2007.
“We started with 58 employees. We’re now up to 87, and we’re looking to hire seven more,” said co-owner Jon McNeill. “It’s not much in the greater scheme of things, but in this town we’re the largest employer by far.”
In addition to seeking this $80,000 loan, the company is seeking to refinance $750,000 through the Vermont Community Development Program. When buying the company, the investment group took out a $750,000 loan from the Vermont Economic Development Authority. After the acquisition, the company was losing money and could not pay the debt back right away. Now the company is slightly in the black this year and is on pace to achieve better results in 2008.
Some of the loan amount will be repaid with monies received from the U.S. antidumping duties on imported Chinese wood bedroom furniture. In the recent duties distribution, Vermont Tubbs received more than $365,000.
The financial moves will provide the manufacturer, which counts Bloomingdale’s among its clients, with working capital to help it fill incoming orders.
When a company receives orders, it must buy lumber, pay suppliers and pay workers, while retailers could take 60 or 120 days to pay for the furniture. For a small, growing company, this can cause a temporary cash flow problem, but McNeill believes this is a side effect of improving business.
He said it certainly isn’t a sign of trouble for the company. He said this is the first time in his four years of ownership that the factory will be open during the holiday season (closing only on Christmas Day) because it has orders to fill, and added that the company also worked through the July 4th week.
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Growing Vermont Tubbs seeks $80K city loan
Dec 16, 2007
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