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Financial Backing Key to First Place Parts' Continued Success

07/31/2012

ABERDEEN, South Dakota - One computer, two people and a basement may not sound like the most likely ingredients in a recipe for business success, but Mark and Gigi Browning combined their resources and ingenuity to turn First Place Parts into an online retailer that has doubled sales each year since 2005, employs ten and operates in a nearly 6,000 sq. ft. facility in Aberdeen.

“I was going out to the mountains to snowmobile all the time, and I couldn’t get all my gear at the same spot,” recalls Mark. “I had to shop at one store to get a coat and another for a helmet and on and on. I knew there were so many people in the Midwest that have to drive hundreds of miles to get gear. I thought, why not put all the gear in one place and make it available online?”

Mark and Gigi worked to bring his idea to reality, moving the business out of their basement and into a small warehouse facility. At FirstPlaceParts.com, customers can find a wide variety of snowmobile clothing, aftermarket parts and accessories. The Brownings have found a niche market that, despite a lack of snow in their immediate market area this winter, continues to grow. This year’s growth has been influenced by the company’s sales to the Canadian market.

“Having the inventory we need to meet demand is very important to our business,” says Gigi. “Internet customers expect that when they place an order the items are in stock and will be shipped immediately.”

“I’ve always said, if you don’t have it, you can’t sell it,” says Mark.

The business’ reliance on maintaining inventory levels meant in order to grow, First Place Parts would need to expand their warehouse space and create a retail space. This challenge led them into a deeper relationship with their lender, Great Western Bank.

“I’ve known Mark and Gigi my whole life. I grew up across the street from them in Aberdeen,” says Matt Zeller, the Brownings’ business banker at Great Western Bank. “As First Place Parts grew, it needed more sophisticated financial products to improve efficiencies, save time and finance expansion. We provide those services, allowing Mark and Gigi to focus on their business, not their banking.”

Working together, the Browning and Great Western Bank determined enrolling in the Small Business Administration’s (SBA) 504 Participation Program was the best way to secure financing for the needed real estate.

The SBA loan allowed them to secure a lower, 20-year fixed interest rate that will save them thousands of dollars in interest. The type of SBA loan the Brownings took advantage of spreads the risk around by making the customer responsible for 10 percent of the loan value, the SBA for 40 percent and the bank for 50 percent.

“Sometimes you think SBA loans are a lot of work and take a lot of time, but that wasn’t the case for us,” says Gigi. “Matt, our banker, had all the paperwork done, and basically all we had to do was sign on the dotted line. There was a little more involved of course, but the process was very seamless.”

“The Small Business Administration loans exist to help businesses expand,” says Zeller. “Connecting our customers with this financing option allows them to grow. Great Western Bank was the top SBA bank lender in South Dakota in 2011 and has been in the top five for the past 6 years. We plan to continue this commitment to small businesses.”

The growth First Place Parts has experienced has not only been good for them, but also for the community of Aberdeen.

“The Brownings have brought good paying jobs into the community. Also, most of their business is derived from online sales, which brings in income from outside the community,” says Zeller. “They are not in competition with another business in our community, providing positive growth.”

The couple plans to build on their hard work and success. As their customer base continues to grow, they hope to expand their offerings. A larger product line will warrant additional warehouse and office space for management and customer service representatives.

This story is a part of a series highlighting small business successes fueled by the partnership between Great Western Bank and our customers.