A Hilton Head Island printing company that worked to launch its own local currency was found in default of about $500,000 in small-business loans this month.
Omega Graphics Direct could no longer make payments on its $800,000 loan from its commercial lender, the Business Development Corp. of South Carolina, a judge in the Beaufort County Court of Common Pleas ruled Oct. 11. The lender received a judgment of $512,529.
Owner Steven Sugg also faces nearly $300,000 in federal and state tax liens on unpaid sales and transportation taxes, according to Beaufort County Register of Deeds records.
Three weeks after the judgment, the Hilton Head Island business no longer is located at 10 Oak Park Drive, but it hasn't closed, Sugg said. Rather, the company is on its way to recovery, he said. "We'll keep fighting. I have every intention of paying my loans and paying back everyone I owe."
Sugg purchased the business in 2008, at the height of the economic downturn and said he decided to invest -- rather than cut -- by adding space and expanding his team to 13 or 14 employees.
"Just closing up wasn't an option, not that I would have done that. I'm not built that way," he said. "But it lasted a lot longer than anyone expected."
Sales shrank as other businesses reduced advertising and printing costs.
By 2010, Sugg began pitching to local businesses his idea for "sand dollars," a local currency aimed at boosting Hilton Head Island's economy. However, the project failed because no full-time volunteer would help him develop the system, Sugg said.
To pay off his loan, Sugg also tried to liquidate some of his most valuable assets, such as printing presses worth more than $100,000 each. However, the market was inundated with similar equipment, so they fetched just a fraction of that, he said.
Sugg defaulted on the loan in July. He said he was told by Business Development Corp. that about 25 other businesses went through the same process in recent years.
Representatives for the lender did not respond to requests for comment.
Sugg said he is working with an attorney to address his tax liens, which he said are based on outdated information about his company.
Sugg said he also refocused his business on small, digital projects, and soon, he and three full-time employees will move back into a permanent space. One day, he still hopes to find someone to champion a local currency.
"Maybe that'll be me when I retire," he said. "I'm always optimistic."
Follow reporter Rebecca Lurye on Twitter at twitter.com/IPBG_Rebecca.