Credit line gives global sales a lift.

Stephen Fantone, Optikos Corp. founder and chief executive, is living out an inventor's and entrepreneur's dream.

It's not a story of overnight riches, but rather a story of steady progress that has turned the part-time, one-person operation he launched in the basement of his house in 1982 to a company with 40 employees, global reach and expected revenue of more than $10 million for 2008.

Today, Wakefield, Mass.-based Optikos is a leading designer and maker of equipment that measures optical-image quality. Its products are used in a range of industries and applications, from consumer gadgets to military applications.

The company's innovations--its staff lays claim to some 65 granted and pending U.S. patents--are used by household names such as Fisher-Price, Mattel, Lockheed Martin, Samsung and Bausch & Lomb.

From his company's new headquarters, where manufacturing operations have been expanded recently, Fantone says a key point in the company's evolution came in 1999, when it bought the system image testing assets of U.K.-based Coherent Ealing Ltd.

That purchase opened doors into overseas markets. Optikos integrated the new manufacturing capabilities into its own and set out to serve new customers in Europe and Asia.

"We took hold of that business and ran with it," Fantone says. "That has served as a central market for us."

The opportunity came with a significant challenge, however. Purchasing cycles in China and elsewhere tend to be longer than in the United States, so customers were ordering machines well before they were ready to take delivery--and pay for them. Those machines may cost $50,000 to $500,000 and to source the components and raw materials to build them, Optikos needed to borrow against the future sales.

However, most U.S. banks won't use letters of credit or similar promises from overseas companies to secure loans.

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That, according to Phillip Dunn, vice president of Boston-based Eastern Bank, is where the Small Business Administration came into the picture in an important way. Dunn, who has been working with Optikos since the early 1990s and had lined up other SBA-backed financing along the way, helped qualify Optikos for the SBA's Export Working Capital Line of Credit.

The program offers up to a 90-percent guaranty on export loans of up to $2 million and helps smaller businesses quickly access overseas markets without draining capital from domestic operations.

Optikos' line of credit eventually grew to $750,000 and enabled it to grow exports to 30 percent of total revenue. Dunn says Optikos no longer qualified for the SBA program by 2006 because of its size, evidence the program worked for the company. Along the way, the SBA program provided Optikos with the financing to "establish a global marketplace for the company and its products."

Today, sales outside the U.S. represent a stable and growing customer base. "Our international sales have kept pace with the overall growth of the company, which is what we wanted," says Fantone.

Having that base has enabled the company to find growth elsewhere. For instance, it's doing more development work for clients and contract manufacturing. Growth is coming from the life-sciences sector, where development of advanced diagnostics requires the type of design support, engineering and production that Optikos can supply.

Fantone's company reflects his lifelong passions. He began building telescopes in middle school. After studying at the Massachusetts Institute of Technology and University of Rochester's Institute of Optics, he took his first and only job at Polaroid Corp. in 1978. That company became one of his first consulting clients.

Because Optikos has been self-financed--Fantone launched it with $2,000--he's retained the ability to pick and choose his course. He credits banker Dunn with helping him sustain "an unusual level of control of our destiny."

"When different markets go up and down, we don't chase the trends," Fantone says.

FANTONE'S GUIDING PRINCIPLE?

"Fairness. Relationships with employees, customers, suppliers and advisors must be equitable."

ADVICE FOR A STARTUP?

"Stick with it; be true to yourself and your personal values. Cultivate a network of supportive advisors, clients and employees."

Optikos Corp. * 107 Audubon Road, Bldg. 3, Wakefield, Mass. 01880 * (617) 354-7557 www.optikos.com * Founded 1982 * 40 employees * 2007 revenue: Just under $10 million