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PRESS RELEASE. From TMC Financing July 2024.
Half Moon Bay, CA – Combining lifelong passion with business acumen is a sure way to achieve entrepreneurial success – and when you add commercial real estate ownership to the mix, you can create a long-term strategy to build additional revenue and long-term wealth. That’s where brothers Tommy and Pete Lundgard find themselves and their thriving business, Tommy Tsunami Surf School.
TMC Financing helped them secure an SBA 504 loan to purchase property and, as a result, they’re creating operational efficiencies, stabilizing costs, and adding revenue streams today while building a foundation for long-term financial security.
Small start, big plans
Tommy and Pete are lifelong surfers in California’s Half Moon Bay area. Before launching their business, Pete was a California State Parks lifeguard who ran the Junior Guards program, while Tommy studied business and launched a successful clothing brand from a plan he developed for a collegiate Shark Tank-style pitch competition. Naturally, both also taught surfing on the side.
After pooling resources, the brothers opened their school in 2018 with $8,000 and a plan to teach surfing to people of all ages. They formed an LLC, bought equipment – including surfboards and wetsuits – built a website, and got insurance. Soon, Tommy Tsunami was bringing the joy of surfing to residents and visitors alike. Today, Tommy Tsunami teaches surfing to more than 1,000 people each year and regularly fills week-long sessions of their summer surf camps for kids to capacity.
Pandemic-driven engagement
When the pandemic set in, they had to shut down for a time but, as an outdoors-only venture, they were soon able to reopen – and business boomed.
“While the initial shut-down was hard, we actually experienced a huge boom in 2020 and we had to scale quickly,” Tommy explains. “It was a pivotal year of working on the business, hiring employees, and reinvesting in gear, staff, and storage. We learned on the fly and it was great to offer something where people could get in the water, enjoy the fresh air, and just have fun.”
Today, in addition to Tommy and Pete, there are about 21 staff in teaching, management, and operational roles.
Growth brings space challenges – and opportunities
As their business scaled, their need for space did, too.
Tommy credits his business mentor, Tom McGuirk, for helping Tommy and Pete understand the importance of securing commercial property for Tommy Tsunami and for introducing them to the advantages of SBA loans. SBA 504 loan benefits include low down-payments of just 10-15%, compared to conventional commercial mortgages that require 30-40% down. In addition, they come with fixed interest rates and repayment terms up to 25 years, which makes it easier to afford the monthly payments while gaining the benefits of property ownership.
“We were storing our equipment at various places, including our parents’ garage,” Tommy says. “It was really inefficient in terms of time and cost and we wanted to buy property, but it’s really expensive and competitive here, so we were shut out from a lot of opportunities.”
While in college, Tommy had met Bruce Whitaker, Senior Vice President of Business Development for TMC Financing. As the brothers were searching for properties, Tommy reached out to Bruce because he’s got years of experience helping small business owners secure commercial properties through TMC and the SBA 504 program.
When they finally found a property that met their business goals and financial parameters, Bruce guided the deal from start to finish.
“While the 10% down payment makes purchasing property viable for small businesses like ours,” Tommy says, “if you qualify for as SBA 504 loan, there’s no reason to buy your commercial property with any other financing option, because there are so many benefits. And we were able to buy land, which is pretty much unheard of for other real estate loans.”
With their property purchase, the brothers constructed a new equipment-storage facility near the beach which houses the gear for their surf school and enabled them to add a new revenue stream – equipment-storage space to rent to people in the area.
TMC Financing’s experience made the difference
In addition to the SBA 504 loan’s benefits, Tommy notes the stellar guidance they received from Bruce and the entire TMC team.
“Our experience with Bruce and TMC was a 10-out-of-10. Real estate projects run into snags and when ours did, Bruce’s experience, communication, and willingness to go above and beyond were invaluable,” Tommy says. “He was totally supportive, which was incredible from a lender and even more unexpected because, in terms of California real estate, this was a relatively small deal at $240,000, even if it was huge for us.”
“Motivated clients make the whole process more enjoyable,” Bruce says about TMC’s work with Tommy and Pete. “They’re terrific entrepreneurs – on-the-ball, responsive, and wise when it comes to launching a successful business and growing a satisfied clientele. I was excited for the opportunity to help them acquire property. This deal was the perfect example of what the 504 loan is designed to do.”
Tommy brings up an important point for all small business owners to consider.
“As entrepreneurs, we don’t have the security of a 9-to-5 job with a retirement plan and we can’t save our way to wealth. We have to build assets, but the majority of small businesses never sell because they don’t have the right asset mix,” he explains. “Having real estate on your balance sheet is crucial for its long-term valuation – it has incredible benefits for your business now and for you in the long run. You can experience yield from cash flow and leverage equity and, eventually, you don’t even have to be in business, you can just gain income from your real estate. That’s why more small business owners need to know about the SBA 504 loan program. I can’t recommend it, or TMC, highly enough!”
About TMC Financing
Founded in 1981, TMC Financing is the leading provider of SBA 504 commercial real estate loans in the nation, funding projects worth over $14 billion across Arizona, California, Nevada, Hawaii, and Oregon. Over 7,000 businesses have benefited from this financing, resulting in the creation of an estimated 60,000 jobs.
This is awesome. Tommy & Pete are great young guys and an asset to our community.