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As published in Toledo Business Journal - November 1, 2020
M&S Ag Solutions, more commonly known by its trade name Paul Martin & Sons, secured a Small Business Administration (SBA) 504 loan, working with its lenders Farmers & Merchants State Bank and the Toledo-Lucas County Port Authority (TLCPA), to construct a new facility at 755 American Road in Napoleon
According to Doug Martin, managing member, Paul Martin & Sons, the financing was necessary to build the facility the company needed in size and function.
“The terms offered by the SBA 504 loan guaranteed us a very low fixed rate for 40% of the principal. We also are locked in on a very low rate of the SBA portion of the loan for a term of 20 years. Another benefit of the 504 loan is that we only needed to invest 10% of our own capital into the project. All this combined gave us the benefit of keeping more cash in our business working for us,” said Martin.
According to Martin, Paul Martin & Sons officially began operations in 1988 when his dad, Paul Martin, started selling new farm equipment from a Texas company called the Tye Company.
“Tye was an innovative company in the agricultural equipment industry, helping to pioneer a new style of seeding called ‘no-till.’ My dad initially grew his business selling and renting equipment strictly from the Tye Company. At the time, my brother and I were eight and 10 years old, respectively, and we would help dad in the business, thus the name Paul Martin & Sons, and my mom would answer the phone. It was the definition of a family business and the business was the biggest part of our everyday lives,” said Martin.
“I left the Napoleon area after high school, attended college, graduated from The University of Toledo, and met my wife there and found a job in the city. After the company I worked for in Toledo declared bankruptcy in 2006, I returned home to the family business. From the time I came home, the business really started to grow. We began diversifying what we offered in equipment sales and service. We had our first $1 million year around 2008. We ended up hiring my cousin and future partner in 2011, Ted Stover,” Martin continued.
“Where I had skills in management, sales, and marketing, Ted is a master mechanic and fabricator. Ted helped our business to be a ‘full-service dealership’ by providing skilled repairs and maintenance to our customers. In 2015, Ted and I purchased Paul Martin & Sons from my dad with the newly formed company, M&S Ag Solutions, LLC. Then, in 2018 Ted and I purchased the business assets of another farm equipment dealership. This dealership specialized in application equipment such as sprayers, and this purchase grew our business in an entirely new sector of farm equipment.
“Today, we sell multiple highly recognized farm and trailer equipment brands. Our service area has expanded to approximately a 100-mile radius from Napoleon and we have shipped equipment across the US and Canada. We have even sent sold machinery to Russia on a couple of occasions. We still do business as Paul Martin & Sons today, recognizing the value of the customer base built by my dad over many years of doing business the right way,” said Martin.
Martin went on to explain that the company is a single-store dealership, but deals in a high volume of large-sized inventory.
“Large facilities and a lot of real estate is the norm for our type of business. We bought the first tract of ground at our new Napoleon location in 2008 right after the banking crisis of that year. It was a case of being in the right place at the right time and taking advantage of a good deal to secure our future. While the general economy was in a recession, the farm economy was beginning a boom period not seen since the 1970s. In addition, US Route 24 was beginning to grow as well, going from two lanes to four lanes,” explained Martin. “With the help of this boom, the need for expanded facilities began several years ago. The increase of exposure we were going to get also made the decision to move easier.”
According to Martin, there are approximately 25,000 vehicles that pass the new building every single day. Around the time the company purchased the new real estate, it reached a point in the business that it could cash flow larger facilities.
“We waited and stayed patient until the time when we could cash flow a facility that would service our business for many future years. Now because of this patience and a lot of hard work, we have a 10,000-plus square foot state-of-the-art facility and 22 acres of land to grow on,” said Martin.
The business is divided into three divisions – sales, service, and parts, and the company employs 11 full-time employees and two part-time.
Martin explained that the business has continued to grow, and the company has positioned itself as a direct competitor to mainline dealerships while staying an independent family business.
“Where larger farm equipment dealerships live in a world of influence from mainline manufacturers and forced conglomeration, we have the advantage of staying independent. We take care of our customers on an individual basis – custom fitting solutions to their needs,” said Martin. “And when there is a concern or issue, we take care of our customers outside of a rigorous company policy that does not take into account protecting a long-term relationship. As mentioned, in 2008 we broke the $1 million mark in sales – and since that time, we have grown annual sales several times over.”
Martin gave credit to the primary lender, Farmers & Merchants State Bank; Mike Schnitkey, the business banker; and the banking team, noting that they have been instrumental in the company’s growth. The company also used Farmers & Merchants for one other piece of financing, which was used for additional ground purchased after construction.
“Laurie Cantrell with the Port Authority has also been a great asset to us in securing our SBA loan. There were a lot of questions that F&M Bank and Paul Martin & Sons had prior to applying for SBA financing, and Laurie has been with us every step of the way. And we are fortunate to have a bank such as F&M in our small town. They are experienced SBA lenders, which is not common in a small town such as Napoleon,” said Martin.
Martin noted that developing relationships with local organizations such as the Port Authority, your banker, your accountant, and your legal advisor is crucial before growing your business with financing, as well as hiring and working with people that care about you and your business and want you to succeed – noting to do it locally if possible, so that when you have questions or problems, the help you need is never far away.
“I would also advise other small businesses to practice patience when looking to upgrade facilities and/or equipment. The cash outlay on a project such as ours was huge. By staying patient, we were able to save a large sum of our own capital and we were able to build a bigger building – better suited to serve our customers. Long-term goals for your business are extremely important as well, and a business should be using financing responsibly to facilitate not only immediate business needs, but long-term ones as well,” said Martin. “An example is the purchase of extra ground we made around the time we started our building. We had 11 acres of ground at the time when we started building. We then purchased an additional 11 acres next to the original land, and that investment insured we would have plenty of space for our business – no matter where things took us in the future. And in a business such as ours, where you need room for large inventory items, space is very important,” said Martin.
