Meineke foreman buys Topsham franchise via first CEI loan of its kind
Photo / Rob Wilson, CEI 7(a) Financing LLC
Jim Chattley, a longtime employee of Meineke Car Care Center in the Topsham Fair Mall, became the first Maine recipient of an SBA-backed 7(a) loan via CEI 7(a) Financing of Brunswick. Chattley bought the franchise from retiring owners Melissa and David Eddy.
Jim Chattley, a 20-year veteran of the Topsham Meineke Car Care Center in Topsham Fair Mall, bought the franchise from retiring owners Melissa and David Eddy using a new loan product from CEI 7(a) Financing LLC of Brunswick.
In the June 25 announcement of the purchase, Chattley noted he did not qualify for a traditional bank loan so he applied for a new type of loan Coastal Enterprises Inc. subsidiary CEI 7(a) began offering a little over a year ago.
The loan comes with the Small Business Administration guaranteeing 75%, Rob Wilson, president of CEI 7(a) Financing, told Mainebiz. The SBA 7(a) loan is commonly awarded by banks, but this is the first time CEI 7(a), a nonbank, is awarding such a loan in Maine.
He said Chattley told him the loan is for $287,000 and does not cover the entire cost of the franchise purchase. Chattley brought other funds to the table, but was not willing to be more specific. Keeping the sale price confidential was part of the purchase-and-sale agreement, Wilson said.
Chattley joined the company with its original ownership in 1997, and said in a statement that he “came with the building” when the Eddys bought it 10 years ago. Chattley most recently was a foreman for 10 years. He is now owner.
He told Wilson he would retain the existing six full-time employees and try to improve their working conditions, including with more flexible work shifts.
“He also said he plans to expand custom work and welding,” Wilson said.
CEI 7(a), which operates nationally, made its first 7(a) loan in the fall of 2015. It has now made eight loans totaling just under $4 million.
“We expect to do $500,000 to $1 million in loans per month,” Wilson said. “We’re ramping up nationally.” CEI 7(a) was approved by the SBA to handle the loans in the spring of 2015.
He said the SBA 7(a) loan program provides a partial federal guarantee to qualified borrowers, enabling lenders to be more flexible than traditional commercial bank underwriting would allow, for example, if the applicant doesn’t have real estate or equipment assets to provide full collateral coverage.
Added Wilson, “These loans are a vital tool in achieving CEI’s broader strategy of creating and preserving quality jobs and building inclusive economies where all have economic and other opportunities. At a time when Carl Icahn is being reported as making a play to build a dominant (maybe monopolistic) presence in the auto repair and maintenance sector, it’s great to support local independents who play an import role in many communities, especially rural and ones that are relatively less wealthy.”
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