1839 E. 42nd Street
Los Angeles, California 90058
Mao Foods, Inc. requested a loan in the amount of $670,000.
The purpose of the loan was to assist in the financial restructuring
of debt to improve cash flow and facilitate a line of credit
to provide additional capital for growth. The loan paid off the
balance of an equipment and working capital loan on Mao Foods,
Inc, which released a blanket security lien on the assets, and
the remainder of the loan was used to pay down the payable outstanding
with their major poultry supplier who had demanded payment when
it went through a merger. After the merger, the poultry supplier
introduced a stricter credit policy than its predecessor and
required Mao Foods to reduce its outstanding account payables.
The release of blanket security lien from the equipment lender
allowed Mao Foods, Inc. to negotiate the line of credit for its
working capital needs. The loan was made to Meridian partners,
the real estate holding company owned by the shareholders of
Mao Foods, Inc.
The subject property is located in the south central portion
of the city of Los Angeles, about 5 miles south of the civic
center, and just west of the city of Vernon. The property's
immediate area consists of older small single-family residences
and industrial properties varying in size and age. Alameda Street,
immediately to the east of the subject, is undergoing redevelopment
as part of the Alameda Corridor Project. The current zoning
of the property is "M2-2" Light Industrial.
Community Development Impact
This loan allowed Mao Foods, Inc., a minority business enterprise,
to restructure their debt in order to improve their cash flow
and provide additional capital for growth. After the merger
of their major poultry supplier, Mao Foods, Inc. began searching
for a line of credit to resolve the different credit policies
between the merged poultry companies. Once the equipment and
working capital lender holding the blanket security interest
was paid off, the line of credit was put in place for Mao Foods,
Inc. The structuring of this loan allowed Mao Foods, Inc. to
stay in business with a healthy future. It allowed Mao Foods,
Inc. to retain its 37 employees at its two plants.
Mao Foods, Inc. is a family owned and managed "S" Corporation.
The Mao family purchased East Olympic Poultry, Inc. in 1991.
In March of 1999, the business changed its name to Mao Foods,
Inc. The name change was a part of the idea to launch the new
image that the Mao family wanted to introduce of the company.
Mao Foods introduced a broader scope of goods offered to their
current customer base and to prospective customers. The first
core area of Mao Foods, Inc. is the production of fresh, premium
quality, poultry in the USDA processing plant; the second core
areas is the wholesale distribution of the processed poultry,
other meats, produce, seafood, and dry goods to restaurants and
markets in the Southern California and Las Vegas Areas. Their
clients include Asian restaurants and regional Supermarket chains
as well as certain nationally recognized restaurants in Los Angeles
County, Orange County, San Diego County, and Las Vegas.
Community Development Finance Effect
The LDC loan that was made to Meridian Partners, the real estate
holding entity, allowed Mao Foods, Inc. to restructure its debt
to allow the company's future growth. The loan paid off loans
that were on the books of Mao Foods, Inc. The new loan was booked
in the books of Meridian Partners. This loan made the two entities
The LDC funds facilitated an additional $900,000 from private
capital for this community development project in the form of
a line of credit. The liens on the collateral used to secure
the LDC loan:
Bank which provided the line of Credit:
Sources and Uses of Funds:
United Commercial Bank
767 North Broadway
Los Angeles, CA 90012
Phone: (714) 532-0700
|Equipment/WC Loan Payoff
|Payable to Major Supplier
|Total Project Cost
|% Project Cost