Barking Up the Right Tree: How a PPP Loan Helped Specialty Products Pet Company Make it Through Tough Times

Two dogs begging for treats

July 28, 2020 - COVID-19 New England

Despite increasing online sales amid COVID-19, PPP funds helped to keep employees whole

Amid COVID-19 and record unemployment numbers, Joe DiStefano's primary goal as a business owner during this time was to spare his employees any concerns about their job security.

The founder of Specialty Products Resources, Inc. -- a family-owned business out of Waltham, Massachusetts, that's been delivering quality pet products for over 20 years -- has been in the pet industry for almost three decades.

After college, Joe worked a major defense contractor for 11 years until the defense industry began to down size. He made a career change and started in the pet industry as an importer and distributor of pet products, instrumental in growing his employer's company. After six years there, the owner sold the business and Joe found himself out of a job.

He found another job in the industry with a pet company out of Brazil, only to see it also get bought out a couple years later. He out of a job yet again.

"That’s when I said to myself, 'I really think I want to try and do this on my own,'" he said.

Joe and his wife Gloria started Specialty Products Resources from scratch in 2000, selling dog bones, rolls, treats, twists, chips, training pads and novelty items from all over the world to beloved pet owners.

Soon becoming a staple in the community, Joe and his family decided to expand the business seven years ago, buying the building they work in of and hiring more local staff, who now number almost 30 employees in total.

This time of expansion is also when the business' relationship with TD Bank started. Their previous banking relationship wasn't able to financially keep pace with their rapid growth and Joe was introduced to the Business Team at TD.

"They really helped us with the purchase of the building and increasing our line of credit from our previous bank," he said. "That's been really instrumental for us and our growth. Without TD financial support, we wouldn't be here today."

'The big thing was to get enough cash flow to make it through' - Joseph DiStefano, owner of Specialty Products Resources

Working on boxing dog treats

Then COVID-19 hit and obviously impacted the business, but in some ways you might not think.

"We were really fortunate to be in the pet food and treats category, which was ruled essential," Joe explained.

Most of our customers are big-box stores that were also deemed essential and remained open. Online sales to consumers also increased. But to reach all those customers who needed their products, especially those stuck inside with their pets, Joe needed an injection of funds.

"We were all nervous about this situation," Joe said, despite the uptick in online sales. "The big thing was to get enough liquidity and cash to make it through."

Sheila Aleman, the company's Chief Financial Officer, said some stores that closed also were extending their time frame to pay invoices, which meant even less liquidity for the business.

These factors combined to create the classic Catch-22: Sales were potentially increasing, but without cash available to produce these extra products, employees would need to be furloughed.

Sheila called an emergency meeting with Joe and they decided to do all they could to keep factory workers whole, including the possibility of cutting pay for themselves and other salaried staff.

'The PPP was a huge blessing' - Sheila Aleman, CFO of Specialty Products Resources

But with TD Bank's help to secure funds through the SBA's Paycheck Protection Program, the company was able to bridge that gap and avoided the need for salary cuts or layoffs. These funds are part of the Coronavirus Aid, Relief and Economic Security (CARES) Act and are forgivable under certain guidelines.

Sheila said the PPP funds also enabled the company to do "fire sales" on treats, since customers were going to stores and buying them out in advance of being stuck inside for weeks or months. SPR customers were quickly running out of in-store inventory to keep their shelves stocked.

She said they had retail customers calling them in panic when stores began to close, inquiring where they could get supplies for their pets at other stores they sold to.

Puppy with toys

"Then we got those stores restocked, so more pet owners could have these essentials," Sheila said. "So, the PPP was a huge blessing and gave us the feeling we could move forward with some certainty, bridge the gap and get through this time."

For TD Bank Senior Relationship Manager Robert Lorenson, it's been "an honor" to serve a business owner who is so passionate about his life's work and his employees.

"I am glad they were able to take advantage of the PPP Loan through TD to perhaps make this challenging time a little bit easier," he said. "Watching Joe's business grow and being able to help them achieve their vision is what we aim for as trusted resources to our customers."

Joe added how grateful he is to TD, the PPP, and his loyal customers that his business is thriving and his employees are still being paid.

"In fact, we're up 10-20% in sales this year from this time last year, believe it or not," he said.

"Without the PPP, this would not have been possible," Sheila chimed in.

"Those funds were the first step to get us through the most crucial time," Joe said. "Then, everything else just fell into place."


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