Personalized relationships form the bedrock of every financial institution and, at First American Bank, they are the basis by which we measure our success. This client-first approach is especially reflected in our long-standing relationship with Miami-based DemeTECH Corporation, where we have been a part of helping them create more than a decade of astonishing growth.
Luis Arguello Sr. purchased DemeTECH Corporation in June 2000, taking the reins of a young, but promising, company specializing in sutures, needles, and surgical blades for dental and eye procedures. What Arguello saw in DemeTECH long term was the demand for U.S.-manufactured medical devices and the ability to grow the company through export sales.
When DemeTECH originally became a customer of ours in December 2008, the company’s first order of business was establishing a revolving working capital line of credit to support their growing export business. Through a creative approach leveraging Small Business Administration (SBA) export loan programs, we were able to provide DemeTECH with the capital support it needed to undertake the company's first major phase of expansion.
By 2014, DemeTECH had begun to automate their production through the addition of custom-made packaging and labeling lines. This investment was critical for the company’s growth as it allowed them to quickly adjust production runs based on the specific labeling requirements of each export market. This move proved critical as DemeTECH was awarded a series of multi-year contracts with foreign health ministries.
These contracts changed the way that DemeTECH approached working capital as they required the company to both support their existing export client base as well as undertake a significant ramp up in production for their new contracts. To support this challenge, First American issued a series of SBA Export Working Capital Program (EWCP) lines of credit. The first was a traditional asset-based line that supported their existing customer base. The second focused on the pre-export working capital required to build additional inventory and the issuance of performance letters of credit.
By 2019, over a decade after first partnering with our bank, Arguello Sr. had grown DemeTECH’s export markets to include more than 140 countries and was poised for significant future growth.
Then, in early 2020, COVID-19 hit. The pandemic began to impact DemeTECH almost immediately, as most elective and non-essential medical procedures were postponed. Yet, as cases began to spike, Mr. Arguello Sr. was approached about DemeTECH’s ability to produce surgical masks, N95 masks, and personal protective equipment (PPE) for frontline workers given the company’s history of working on FDA approved products. DemeTECH quickly pivoted their business model. Working daily with our SBA loan program specialists, we were able to finance the installation of thirty surgical mask and five N95 mask production lines at the Miami Lakes and Doral, FL locations over the next several months.
By July, the company was producing over 30 million FDA-approved surgical masks a month. DemeTECH’s agile pivot also resulted in the hiring of another 875 employees from their initial 125, boosting the local job market while national unemployment skyrocketed.
This past October, Mr. Arguello Sr. formally established DemeTECH’s surgical mask and N95 divisions, leveraging the company’s FDA experience to secure contracts with the Department of Defense and Veterans Administration, the states of Mississippi and Florida, as well as a variety of corporate clients.
To meet this next stage of growth, DemeTECH recently closed on a new 159,000 SF manufacturing facility in Miami Lakes, Fla., which our team supported through the use of the SBA 504 Program. A number of our manufacturing clients have utilized the SBA 504 program in 2020 spurred on by the combination of low long-term fixed interest rates and a reduced down payment of 10% which leaves more liquidity in the business for future capital needs.
Through such a turbulent year, we are proud to highlight the continued growth of our clients. Working alongside DemeTECH to find new solutions to the challenges that were being faced is one of our many client success stories. When we say relationships are personal and matter for long term—we mean it.
