A metal-fabricating company in Milwaukee received a $1.4 million loan Tuesday to help pay off existing debts and expand its operations.
Compo Steel Products Inc., 3637 N. Holton St., Milwaukee, is the owner of a plant that makes metal products for use in structural members and cabinetry, as well as for various other purposes. The company’s customers are often found in the transportation, construction and agricultural industries.
The Milwaukee Economic Development Corp., which provides low-interest loans to businesses in the city, approved a $1.4 million loan to the company at a meeting Tuesday. The corporation, also known as the MEDC, is closely aligned with the city of Milwaukee and makes loans through partnerships formed with private banks.
The MEDC specializes in arranging low-interest loans for projects that, because of the risk they carry, would normally entail high borrowing costs. The primary lender for the loan to Compo is Ridgestone Bank of Brookfield.
Of the $1.4 million to be lent, $500,000 is to be used to refinance Compo’s existing debt and $900,000 to hire workers and add to the company’s inventory, according to MEDC documents. The company has 60 full-time employees and plans to bring on 30 more within two years if sales increase as quickly as company officials expect them to, according to David Latona, president of the MEDC.
Representatives of Ridgestone Bank and Compo Steel did not immediately respond to requests for comment.
Not all MEDC loans have been successful at keeping businesses within the city limits. Just last month, the metal-fabrication company E.R. Manufacturing Co. announced plans to move its 160 employees from Milwaukee to Menomonee Falls. The announcement came after the MEDC had provided a $2 million loan to help the company purchase new equipment. Despite the move, the company remains under an obligation to repay the loan.
“Once they move the assets outside the city, the loan repayment is accelerated and required to be paid at that point,” Latona said. “This is a requirement of all our loans.”
Among the two other MEDC loan proposals approved Tuesday afternoon was one calling for $321,000 to go to H.W. Woodwork Inc., a Milwaukee company that sells residential architectural mill work and cabinetry. The other calls for$180,000 to go to Sorenson Investments LLC for the purchase of a commercial property at 2714-2716 N. Dr. Martin Luther King Drive.
The loans to Compo and H.W. Woodwork Inc. come amidst a rise in the construction industry’s fortunes. Construction employment in July climbed to its highest level since February 2009, while the number of unemployed workers with construction experience shrank to a 14-year low, according to an analysis by the Associated General Contractors of America.
“The latest Census Bureau data show the amount of construction spending is rising at the fastest rate since 2006,” said Ken Simonson, chief economist at the trade association. “And there are several indicators—such as the steady increase in hiring of architects and engineers—that suggest demand for construction will remain strong.”