When three experienced concrete mixing and delivery professionals left their employer to start their own business, they worked tirelessly (and sometimes at a loss) to find their first few clients. In business for too short of a time period, obtaining small business loans from traditional banks remained out of reach.

Small Business Loans can include many things from fresh capital to new equipment.

Constrained by a 5-year non-compete contract they’d signed with their employer, they had to resort to building new relationships, cold-calling and setting appointments with strangers.

They adhered to the non-compete contract, even though it slowed their true growth potential. Five years passed quickly enough, and once these executives got on the phones with their previous contacts, they began booking new deals. Clearly, they had built solid reputations with contractors and builders.

A good problem to have, right?

Well . . .

The concrete company suddenly had 20 contracts to fulfill, but only 6 trucks. They had plenty of material to haul, but they needed equipment and working capital to manage the growth. Most daunting, they had just 20 employees and they determined they needed 50 to complete the jobs. The three had already run through much of their savings building the business from ground zero.

Traditional banks turned them down due to their limited time in business. The company showed the traditional banks the contracts they had to fulfill, their history in the industry, but the loan officers were limited by strict rules and regulations on lending requirements.

The three executives left their original company because they felt they could provide better customer service in a more timely manner. They had plenty of work, but limited financial resources to perform on this work.  Growth, they found, could be as challenging to manage as slow times! 

The company approached LendSpark, looking for the working capital to hire and buy supplies. The extensive industry experience the borrowers could show as well as their contracts convinced LendSpark to arrange a short-term bridge loan. The company was well-positioned in the southwest United States and was taking advantage of some of the large highway and commercial projects underway in their area.

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Once the jobs were completed, the cement mixing and the delivery company had closed business on the books. Their accounts receivable were substantial. They could then “factor” those receivables, getting monies owed to them quickly enough to fund supplies and labor for new jobs.

Factoring is not a loan, but an advance against the revenues a business has signed a contract to receive. It’s convenient because it allows businesses not only to take advantage of volume vendor discounts but to extend credit to customers, a business feature that’s always appreciated. At such a low cost, businesses often factor their accounts receivable month after month until they build sufficient capital to them a cushion. These cushions gives them breathing room and funding to say yes to clients who want to finance their work and vendors who offer deals on cash payments.

In less than one year, LendSpark was able to arrange a large line of credit that helped position the company for long term growth.