27 Dec Invoice Factoring Success Story – Metal Fabrication
Metal Fabrication Company Grows from $0 to $20 Million with Invoice Factoring
James Stevens* was a successful sales manager for a large roofing supply company in Houston Texas. At age 51, he was earning a good salary with benefits and had topped out in his career.
Then he had a heart attack. His doctor told him he needed to reduce some of the stress in his life.
James had always been something of an inventor and while he was recovering in the hospital, he could see part of the hospital’s roof outside his window. One day while in the hospital, he watched some workers install a cellular antenna on the roof of the hospital building. He noticed that they drilled holes into the roof to attach the equipment, a big “no-no” in his mind because the roof warranty would be voided. Suddenly he thought of a better way to mount equipment and antennas on the roofs of commercial buildings so it would not be necessary to penetrate the roof and thus maintain the roof’s warranty.
A Metal Fabrication Company is Born
James got out of the hospital and while completing his recovery at home, designed several different kinds of equipment supports fabricated out of metal that could be used for cellular towers and other equipment mounted on roofs of buildings without piercing the roof or penetrating the roofing cover material. These inventions would become the primary product line of his new metal fabrication company.
Invoice Factoring Financing Method of Choice
After obtaining several patents, he decided it was time to quit his day job and start selling his roof support systems. He formed his metal fabrication company and soon the orders began to roll in. James quickly understood that invoice factoring was the easiest way to start his business. Sam Thacker of Business Finance Solutions helped James establish and use factoring effectively for his metal fabrication business for many years.
Metal Fabrication Company Experienced Rapid Growth
At first, he had his roof supports manufactured by a local contract metal fabrication company as he began selling to AT&T, Sprint, and other cellular companies that were doing massive nationwide build-outs of their cell systems. Many of the carriers’ antennas were placed on roof tops. Not only were his mount designs “roof friendly” but they also allowed a larger amount of weight to be placed on the roof because of weight distribution characteristics of the support devices.
Invoice factoring allowed James’ metal fabrication company to carry the large amount of accounts receivable for the 45-60 days that it took for the large cell phone companies to pay.
His company was profitable within several quarters of starting out and continued to grow very rapidly. As the cellular tower build-out boom slowed, Jim invented other types of supports that could be used for other equipment and diversified his industry and customer base. His metal fabrication company is now 11 years old and he has used factoring the entire time as his primary financing method for working capital. He considers it has been cheap money when compared to what he would have given up in ownership of his company to raise equity through investors.
Today his metal fabrication company manufactures many types of roof mounts that support cell towers and solar panels on commercial buildings, and is expanding product lines.
A Success Story Made Possible by Invoice Factoring
Jim’s company has revenues of over $20 million and EBITA of nearly 17%. Jim would not trade in his invoice factoring relationship for anything, even though he could qualify for more traditional types of credit or bank loans. Invoice factoring can be a good financing solutions for rapidly growing companies like Jim’s company who wants to retain ownership and likes the ease and flexibility of expanding credit lines. Accounts receivable financing (another name for “Invoice Factoring”) is designed for business to business companies with ongoing contracts with large companies, government contracts or service agreements. To find out if invoice factoring is right for your business, call Sam Thacker for a free consultation. 512-990-8756.