Long-time sales leader purchases Birsch Industries
Borrower : J&L Hermes Supply, LLC
Where : Virginia Beach, VA
Loan Amount : $1.3 million; $200,000 line of credit
Project Type : SBA 7(a) Loan
Opportunity
After working for Birsch Industries for 23 years – including overseeing the day-to-day operations in the last year – Joshua Hermiz, along with his wife, Laura, wanted to buy the long-term successful business.
Founded in 1964, Birsch Industries manufactures and distributes cleaning supplies and office products. The Birsch portfolio includes 200 of its branded products, along with more than 1,000 facility, cleaning, and office supplies.
Key to the Birsch Industries’ success is its sales team, which includes some of the longest-tenured representatives in the Tidewater region. Based on its quality performance, Birsch also is one of the few local companies with approval to serve the Naval Station Norfolk (NSN) and to access naval ships, giving them a tremendous opportunity with military clients.
Beyond government and military customers, Birsch’s more than 3,000 diversified clients include schools, hotels, restaurants, medical facilities, and other contractors, including those providing environmental services, janitorial services, and industrial work. Birsch is Virginia’s only manufacturer certified by Green Seal, which runs a national environmental certification program.
Joshua Hermiz came to Birsch after six years in the U.S. Navy, where he served as an enlisted nuclear engineer. Mentored by the founder, he developed his business and sales acumen. Within two years, he was the top salesperson and continued to advance through leadership positions until he was named vice president and general manager.
With the owner looking to sell the business and retire, Joshua and Laura Hermiz formed J&L Hermes Supply, LLC to purchase the company in January 2020 and transition ownership to the new entity. Still operating under the Birsch Industries name, all 24 employees – including two key managers – have committed to staying with the company under the new ownership, ensuring continuity of a strongly performing company.
Solution
SBA Term Loan
The couple sought financing from VCC to help them with the acquisition and transition of ownership. VCC provided a $1.3 million SBA 7a term loan to cover a little more than half of the total purchase price, coupled with a $200,000 SBA Express working capital line of credit to aid with needs that may arise during the first two years of ownership. The acquisition deal includes purchasing existing inventory and assets, as well as renting warehouse and office space.
The 7a loan program is the SBA’s primary program for providing financial assistance to small businesses, with lenders having flexibility in developing loan terms.
Impact
Working with VCC to secure an SBA 7a loan helped Joshua and Laura Hermiz buy their own business. Providing capital to fund this acquisition will maintain competitive jobs in the local market, as well as open up opportunities for continued business growth and the creation of additional jobs.