For nearly four decades, Andrew Yap’s parents relied on income from outside jobs, high-interest credit cards, and second mortgages on their home to help fund the growth of the family’s health food products business. It’s a story deeply familiar to entrepreneurs, and by 2014 the Yap’s patchwork quilt of capital had started to fray.
“We were paying all this interest on top of covering our fixed costs, and it was getting really tough for us,” Andrew, president and CEO of Liberty City, Fla.-based Leasa Industries recalled. That’s when Andrew connected with Brian Clay, executive vice president and director of commercial banking at BankUnited.
“They really were trying to grow this family business, and in doing so, they were helping so many people,” Brian recalled. “We knew we had to find a way to help them.”
BankUnited provided Leasa with access to cost-effective business loans and helped optimize the company’s capital structure. Today, Andrew credits the bank’s partnership with helping Leasa become one of the largest growers, processors, and packers of sprouts, vegetables, and noodle products across the Southeast United States. The company is also a third-party logistics provider for numerous produce suppliers from across the U.S. and Canada.
A family affair
L. George and Einez Yap, Andrew’s father and mother, started Leasa in 1977. George and Einez, had immigrated from Jamaica to escape political upheaval. An entrepreneur from the start, George borrowed money from family and friends to buy an embattled sprout growing business in the U.S.
“He immediately started growing the business, but there’s that saying about how you have to continue to feed the beast,” Andrew said. “In the first year, he put $40,000 into the company and made about $1,000.”
But the elder Yap wasn’t discouraged. Instead, he saw the potential to expand the company’s product line, adding stir fry and soup mixes, and other specialty sprouts. Along the way, the company employed multiple family members, including Andrew’s wife, two sisters, two uncles, an aunt, and several cousins.
President and CEO Andrew Yap with Founder and Advisor George Yap
Andrew started working at Leasa when he was 16, making tofu and working on the production line. He joined the company officially after graduating with a business degree from Florida International University and after working as a consultant at a marketing research firm. To stay current on industry and strategic trends, Andrew teaches marketing and logistics strategy courses for FIU’s Masters in Logistics and Supply Chain Management Program.
A perfect storm of business challenges
As Leasa became more successful, the company’s capital crunch became more apparent. For example, the company invested several million dollars into a new facility, a move that paved the way for growth, but also increased fixed costs. Unfortunately, one of the company’s largest customers declared bankruptcy a year later, leaving Leasa with hundreds of thousands of dollars in unpaid invoices. During the same time period, company sales slowed due to the 2008 recession.
"Your fixed costs don’t go away, even if your sales dip,” Andrew says. George, the company’s founder, used life insurance proceeds from his wife’s death in 2005 and credit cards to help keep the company afloat during the downturn.
“Starting the third-party logistics arm of our business in 2011 ended up giving us a light at the end of the tunnel,” Andrew said. By 2011, Leasa was back on a growth trajectory and Andrew started to think about how to restructure the company’s debt and working capital.
Solving a capital conundrum
“It’s always been part of BankUnited’s core principle to be heavily invested in our community and be a resource to local companies,” Brian says. In fact, BankUnited has long been active in Liberty City. That is where the bank launched its Adopt-a-Neighborhood program, which aims to drive positive social impact through various initiatives from financial education services to support for women and minority-owned businesses.
Brian reached out to Andrew at just the right time. Andrew was wrestling with bureaucratic challenges at his current bank and welcomed an introduction to a new partner. He invited the BankUnited team for a tour of Leasa’s facility.
“We talked about what we needed, which was refinancing the mortgage on our facility which would give us room to breathe,” Andrew said. “The BankUnited team came into my conference room with computers and stayed there for hours crunching numbers; the mentality was ‘we’re going to solve this for you now.’”
Brian’s team immediately recognized that the company’s current financial plan constricted its opportunities for growth. “Like many family businesses, they had made a series of decisions that were the right decision at the specific time, but collectively they created a less-than-ideal capital structure,” Brian said.
A banking relationship for the ages
With BankUnited’s help, Leasa consolidated its debt into a more affordable, long-term loan based on its biggest asset—its building—and established a line of credit. The move freed up cash flow the company used to drive even more growth.
Just as importantly, the results of that first interaction launched a decades-long partnership between Leasa and BankUnited. Over the years, Brian and his team have become deeply familiar with Leasa’s financials, operations, goals, and financial needs.
“Brian and his team are in our corner,” Andrew says. “It’s like being part of a family.”
The partnership represents the kind of teamwork that has made Leasa successful for 45 years and counting. Leasa is renowned in Florida, not only for the quality of its products but also for its contributions to the South Florida community. The company is one of the largest employers in Liberty City and a long-time second-chance employer providing job opportunities to previously incarcerated individuals.
For Brian, the relationship underscores the importance of small and mid-sized businesses having a long-term banking partner that jointly helps fuel the economy and the local business ecosystem.
“That trust and understanding means that we don’t have to cover the basics when we connect,” Brian says. “They can focus on growing the company and their success and trust us to provide them with the best solutions for doing so,” Brian says.