Diablo Cable Connects our Wired World

TMC Financing provides SBA 504 real estate loan to support manufacturing growth. Diablo Cable designs and manufactures fiber-optic and low-voltage datacenter cables from its new 3,000-square-foot manufacturing facility/warehouse in Pleasanton, CA.

In the midst of the Bay Area tech boom, Diablo Cable is a shining example of how family-owned small businesses can thrive. Thanks to TMC Financing and a Small Business Administration 504 real estate loan, the local manufacturing firm found the space it needed to grow.

“It’s a blue-collar business,” said Gary Moore, owner and CEO of Diablo Cable in Pleasanton. “It’s not pretty or exciting, but it works for us.” As a designer, manufacturer, distributor and outfitter of fiber-optic and low-voltage datacenter cables, Moore downplays the integral part Diablo Cable products play in today’s wired world.

“We don’t always find out where our products are going to be used,” Moore said, but noted that Diablo Cable custom-built fiber-optic cables were a part of the lighting system for Cirque du Soleil’s Michael Jackson ONE Las Vegas Show. “There’s a lot of mechanical movement and optics in that show,” he said. “They required cables with specific flexibility needs in order to move rapidly across the stage.”

"We needed a flexible space to grow with us. If you're leasing, you can't tear up the carpeting, polish the floors and run the type of electrical and other modifications you need for manufacturing. It's just cost-prohibitive. Unless we own the space, making changes is all a lost investment when you move."

Gary Moore

Owner and CEO of Diablo Cable

When film director James Cameron’s go-to digital post-production studio, Modern VideoFilm, needed to ramp up a new building in Burbank with high-bandwidth, optical trunk cables for their work on Avatar, Diablo Cable was able to service their needs.

“Not all customers are high profile, but Diablo Cable products have been specified and deployed in numerous military and government applications including the White House and other critical government installations in and around the Washington, D.C., area,” Moore admitted. “We also thought it was interesting when, leading up to the last election, both the recent Democratic and Republican national conventions placed orders for our products to bring those venues to life.”

As Diablo Cable’s reputation for quality, speed and custom engineering grew, the business quickly outgrew its former base of operations. “Diablo Cable needed room to expand,” said Mike Copeland, managing director at DTZ (formerly Cassidy Turley), who brokered the purchase. “Initially Gary was just looking for new space to lease, but why not pay yourself rent?”

“We needed a flexible space to grow with us. That was the driving force in us seeking our own space,” Moore said. “If you’re leasing, you can’t tear up the carpeting, polish the floors and run the type of electrical and other modifications you need for manufacturing. It’s just cost-prohibitive. Even the fiber-optic and data connections needed to be custom installed. Unless we own the space, making changes is all a lost investment when you move.”

Moore bought and renovated 3,000 square feet of office flex space at 415 Boulder Court in Pleasanton using an SBA 504 loan from TMC Financing. Moore said the loan’s low down payment made it possible. “Honestly, the financing was the easy part,” he said. “In a business involving inventory, every dollar you spend otherwise takes inventory off your shelves. If you don’t have it, you can’t sell it and customers are going to go somewhere else. They may never come back,” he said. “Even 10 percent down was a bit uncomfortable. I can’t imagine having to come up with double that for conventional financing.”

Diablo Cable designs and engineers its own products, manufacturing some locally and partnering with overseas suppliers for others. “TMC is reviving a dying industry. Manufacturers in California are escaping to the hills,” Moore said. “It’s hard be a manufacturer in the U.S. and be competitive, and in California, it’s even harder with the high wages and regulations. For us, owning the building was part of the solution.”

Amazon.com is one outlet for Diablo Cable products. “With Amazon Prime, products are physically sitting in Amazon’s warehouse for ultra-fast shipping. For fulfillment by Amazon, suppliers are required to keep them stocked,” Moore explained. “It’s important to keep a supply of every product there at all times and we stock hundreds of items with them. This space has allowed us to continue to scale our Amazon business and satisfy even more of our devoted Amazon customers. You can’t waste time, space or product. That’s how it works.”

Moore said the flex space that’s half office and half warehouse has made that sort of long-term planning practical. “When you’re leasing, you go to Costco and buy shelving units to store inventory,” he said. “When you own, you can invest in custom industrial shelves that better meet your needs and have them professionally installed.  It’s not inexpensive, but when you own you can think long-term and install space-saving racking that’s bolted to the floor and seismically secure. You just can’t do that when you’re leasing, and it makes all the difference for us in efficiency.”

Moore is a Bay Area native and a fourth generation small-business owner. “My great grandfather owned a piano shop in Berkeley, which my grandfather took over in 1947,” he said, adding that a vintage photo of that shop, printed on canvas, was the first item he brought to the new space for display in the lobby. Moore’s father was also a small-business owner and eventually joined his son to run the engineering and production departments for Diablo Cable.

“Kurt Chambliss and the TMC team made it possible for us to own our own space and it matters to us,” Moore said. “Kurt acted as a professional consultant on our behalf and even brought us to Daniel Fujimoto at Community Bank of the Bay to secure the bank financing portion of our loan. We cannot thank Mr. Chambliss, Mr. Fujimoto and Mr. Copeland enough for bringing building ownership to fruition.”

Moore said buying the building is already making a big impact on his business. “In the defense and aerospace industries, companies look for a supplier that has quality they can count on,” he said. “Suppliers to these industries need to have an audited quality management system in place. We have been working tirelessly and are targeted to become ISO 9001:2008 certified in the first quarter of this year. You could implement a QMS in a leased facility, but with the huge investment in money, time and resources it takes, it helps to know we’ll be here for years to come and our investment is secure. Certainly two of the best moves we made in 2014 were connecting with TMC for our building purchase and implementing our quality management system.”

 

About SBA 504 real estate loans

The Small Business Administration 504 loan program allows small-business owners to finance commercial real estate and other fixed assets with long-term, below-market, fixed interest rates. SBA 504 loans can be used to finance the total project cost (TPC), which can include the purchase price, construction/renovations, equipment, soft costs and closing costs. A typical 504 loan project requires a down payment of only 10 percent of the TPC from the borrower, with the remaining amount split between a first mortgage provided by a commercial lender and a second mortgage provided by a certified development company (CDC). By enabling owners to keep their capital working to grow the business and create jobs, the 504 program provides businesses and communities long-term stability. Business owners can confirm that they meet the qualifications for an SBA 504 loan by visiting the TMC Financing website.

About TMC Financing

Founded in 1981, TMC Financing is the largest provider of SBA 504 real estate financing in Northern California and Nevada. TMC consistently ranks among the top CDCs nationwide, funding projects worth more than $8 billion across California and Nevada. More than 4,700 businesses have benefitted from this financing, resulting in the creation of an estimated 35,000 jobs. For more information on SBA 504 loans and the local businesses they support, visit tmcfinancing.com.


Categories: Finance, Real Estate, Business Finance, Business

Tags: commercial real estate loan, Diablo Cable, SBA 504 loan, small business financing, small business loan, TMC Financing


About TMC Financing

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TMC provides below-market, fixed rate, long-term financing to small businesses for the purchase, renovation or construction of commercial real estate through the SBA 504 program.

Lindsey Paley
TMC Financing
TMC Financing
1720 Broadway (3rd Floor)
Oakland, CA 94612
United States