Palm Bay, FL
Excellent Electrician’s Business Growth EXPLODES – Without the Working Capital to Keep Up
A very successful electrical engineer decided it was time to start his own electrician business. Upon joining up with a partner for the extra capital, he starts working with small, local builders that he knew were unhappy with their current electrical services. Once he went to work for them, they were extremely impressed with his skills and the quality of his character, and word of his business spread rapidly.
Shortly after, he was taking calls from the largest builders in town who wanted to hire him for large building projects that covered multiple units. The electrical engineer/business owner was thrilled for the boom in business, but he wasn’t prepared to scale that quickly. To fulfill these requests, he was going to need to hire additional electricians, buy more vans, load up on equipment and supplies…
Now, he faced a huge dilemma: does he stay stuck growing at the rate which his cash flow will allow? Or does he find more capital?
The major problem with finding a loan at this point in his business, is that he wasn’t in business long enough to be considered “stabilized” — meaning that he couldn’t qualify for SBA loan programs. To add even more challenges, he also found out that his partner, with whom shared the business 50/50, had a sub-600 FICO Score.
Luckily, his CPA knew to call ComCapFL to discuss his options. Thanks to our background in business ownership and development, we were able to see the past the risk of this loan and visualize the potential. We issued a term sheet, knowing that with time and some extra tools, he’d be ready for an SBA loan that would help his business skyrocket.
To bridge their interim needs, we secured him a term loan to help cover expenses for the rest of that year. But then, when he finally submitted his interim financial statement, another major issue came to light: bookkeeping inconsistencies. 😱
However, that didn’t stop us from following through with our commitment to close their loan. We took the time to work with them on identifying the inconsistencies, while they hired a new bookkeeper to do a little triage to fix the issues. Once those issues were corrected and brought back to us, we underwrote the SBA loan for a second time and closed the deal, as promised.
What was the big takeaway? There are a couple of great lessons here!
Lesson #1: Plan ahead. Until your business is stabilized, it’s next to impossible to obtain a loan or working capital in the first year once you start operating. However, it is a lot easier to do a startup loan based on pro forma. Had we met the electrician before he started officially operating the business, we could have helped him with a stronger base of working capital, allowing him to keep up if he was to scale quickly.
This brings us to lesson #2: If we accept your loan, we’ll close it! That statement isn’t hyperbole – we mean it. Once we issue our term sheet on your loan, our team will work diligently to close it.
Are you ready to see what ComCapFL can do for your business? Contact us today or use our Loan Finder App to discuss your loan requirements, and we’ll explore thousands of loan programs to find the best options for you – no commitment necessary.
Want to learn more about SBA Loans? Click here!