Atrium Painting
Painting the Way to $1Million
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Needs:
- Access to capital to even out cash flow
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Custom Lending Package:
- $100,000 line of credit at 18% APR
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Results:
- Hired dedicated staff to facilitate growth
- Fast, direct access to capital
- Easy to manage monthly payments
- Ability to draw against credit line as needed
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Owner:
Patrick Dunn
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Location:
Coconut Creek, FL
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Industry:
Contractor
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Year in Business:
2005
After an unexpected layoff in 2005, Patrick Dunn and a colleague decided it was a fortuitous happening and embarked on a new adventure: business ownership. Initially launched as a two-man exterior painting and waterproofing company, Atrium Painting experienced rapid growth in the first few years. Dunn, president of the company, expanded services organically as positive word of mouth generated new clients. Soon, Atrium’s clientele grew outside of strictly residential services to include the commercial market.
“That’s when the change came,” says Dunn. “We’d grown used to being paid on the spot for domestic house painting. However, a painter needs to take on hundreds, if not thousands, of domestic jobs per year to build a stable, steady business that is not affected by seasonal changes.”
Revenue increased dramatically for Atrium once the company entered the commercial market. But the insurance requirements and staff required for consistency caused costs to skyrocket. Atrium had used independent subcontractors for domestic jobs, but now the company needed to have permanent, reliable staff on its payroll to ensure quality work for its clients. This required more expensive insurance to cover workman’s compensation and other liabilities.
“Our variable costs became fixed costs, with staff that needed to be paid, regardless of whether the customer paid on time, and our billing cycles varied,” said Dunn. “We were doing great, but we weren’t solvent because we had no cash on hand. I could take on major projects, but the challenge became keeping all of the balls in the air.”
This was the tipping point and Dunn realized to keep Atrium growing, he needed small business financing. The initial search turned into a feeding frenzy of loan shark that make him want to quickly abandon his entrepreneurial dreams of growth.
“There are so many people who want to loan you $30,000 for example, but in nine months they want you to pay them back about $40,000. They want to make deductions from your checking account on a daily basis. I submitted applications for loans only to receive responses saying I was approved for really awful terms.”
Dunn had filled out an online application with a loan broker that gave his name to multiple loan vendors. Then his luck turned.
“I was ready to throw in the towel, when Dealstruck called with very reasonable terms. The interest rate they were offering was a bit higher than a typical loan, but our business had relatively new credit so it made sense. Even so, I wasn’t stuck having to pay ridiculous interest. Dealstruck was the last to call, and the last loan vendor I spoke with. Their line of credit product made perfect sense for Atrium.”
The Dealstruck asset-based line of credit meets the working capital needs of growing small businesses. The line of credit lets a business pay down its credit loans at any time throughout the month as its collect payments from its customers. These repayments are immediately applied against the line, resulting in increased availability.
“I’ll admit I was waiting for the other shoe to drop, but I’ve recommended Dealstruck to many of my friends. It was simple and I got the cash the next day. The experience has been great.”
Atrium Painting has grown from $400,000 in revenue to just over $1,000,000 in just over a year.
“That’s the effect it has had,” said Dunn. “The loan really made an impact for us. Clearly if I hadn’t found Dealstruck, our aggressive growth could not have been possible.”
