Operating since 1975, Rugs America Corporation is in the business of distribution and sales (wholesale and retail) of area rugs throughout the US. The rug business has grown and changed dramatically over the past decade with production shifting from traditional rug weaving centers to mass production of high quality looks. Once the exclusive province of the wealthy, fine area rugs are now available at affordable prices to mass consumers. Reflecting that trend, Rugs America has set up rug departments with chain stores as well as operated through retail centers and wholesale accounts.
Currently the company is renting offices in Great Neck, Long Island and a warehouse in Fairfield , NJ. The company realized that, to support its growth, it needed to achieve economies and efficiencies which were impossible with disjointed locations. Principal Behnam Hakimian arranged for the company to relocate and consolidate its operations into 18,450 feet in Farmingdale on Route 110. This location not only will provide efficiencies and economies of consolidation, but will give the company a much needed visible retail location, further enhancing its retail operations. Like many small businesses in the process of expansion, Rugs America needed to preserve its cash for its working capital needs and so sought out a financing package which would accomplish just that. Enter the SBA 504 loan program. Of the entire project cost of acquisition, construction and soft costs, GE is lending 50% in a first mortgage position. Long Island Development Corporation is making an SBA 504 loan for 40% in second mortgage position. The company is putting in just 10%, an affordable amount, which leaves its working capital intact.
"The long term nature of the financing together with the low blended rate and the fixed rate offered by LIDC have made this a very attractive package,” says owner Behnam Hakimian, "Having been in the business of area rugs for many years, I know how important it is to stay competitive, this financing will permit me to expand my business and stay ahead of the competition, while keeping jobs here on Long Island.”