Client: Audiobahn (Brea, CA)
Business: Manufacturer of innovative, high-quality, car audio products including audio/video components, DVD, head units, amplifiers, subwoofers, speakers, enclosures and accessories since 1997. The company began with 10-12 products that were manufactured abroad then shipped to their 1,500 square foot warehouse in Buena Park, CA. Sales in year one were $1.2 million.

Key players: Saad Aboudabo, COO of Audiobahn; formerly a banker with over twenty years experience in commercial lending

The Challenge:
Audiobahn faces lead times of 45-75 days between the time they place an order and the time product is available in their warehouse. During that time, the company needs to maintain inventory to fill client orders. When Gerber first met with Audiobahn in 1998, the company was positioned to grow quickly but required aggressive financing to purchase larger inventories.

The Gerber Approach:
Gerber’s team met with Audiobahn at their premises in California and quickly established a rapport with the owner of the company. They researched the market for Audiobahn’s products, checked the viability of the company’s projections and examined their brief financial history. Within days of the first meeting, Gerber approved a line of credit of $300,000.

“If Gerber is going to work with you, they are going to know that you can grow, that you are going to be profitable. Gerber has foresight. They say ‘you may be making $10,000 now, but with your product, your market and your plans, you can make $500-600,000 in three years,’” says Saad Aboudabo, Audiobahn’s COO.

Gerber extended the initial $300,000 line of credit for Audiobahn to purchase its inventory in a combination of letters of credit, guarantees and direct payments. This financing allowed Audiobahn to leverage its own resources, including their inventory value, to purchase new inventory and create growth.

Results:
Since 1998, Audiobahn has grown to offer more than 3,000 products with sales of $54 million.
In 2004, Audiobahn had a $5 million credit line with Gerber. Together, Gerber and Audiobahn decided that they had grown the business as far as they could together.

Audiobahn is now working with a larger bank for their line of credit, but they still look to Gerber for insight on a regular basis. Says Saad, “I still pick up the phone and call Gerald to see what he thinks. With Gerber you are buying a relationship, not a loan.”

Website: http://www.audiobahn.com