Everything was going great until the markets crashed in of June of 2008 and the US Economy went into a recession.
Our company took some big losses. At the time we were in the middle of several large commercial glazing projects. Several of the contractors we were working for started to hold up our payment draws. They started use just about any reason they could find to not have to pay us each month, or in some cases for several months.
They would do whatever they could to sit on the money they had as long as possible. It was a struggle even getting our 10% retainage money once the projects were completed. We even had one contractor that filed bankruptcy at the end of the project and we lost over $100,000 from that one contract alone.
During this time I had started educating myself on how to market our company on the Internet. I figured that was the way the future was going. I started learning different sales and marketing techniques that were mine blowing. I figured this would take our company to the next level and pull us out of the debt we were starting to accumulate because of the recession.
We made it all the way to the summer of 2010 and I thought we would just be able to pull out of it. At the time I applied for a loan for a loan to consolidate our debt that would result in reducing our monthly expenses by 26%. However at this time the banks were still tight and very strict on who they would let borrow money. The local bank I was working with said they would finance a portion of our reconsolidation loan and then team up with the SBA "Small Business Administration" to finance the rest of the loan amount.
Everything at our local bank was approved quickly. Then it was a waiting game for the final approval through the SBA this process took several months.
Finally I remember the exact day, I had just finished up having lunch with a new project manager we were going to hire. He had just flown in the day before from California. I remember clearly I was on my way back to the office when I received a call from my wife saying that the SBA office in California denied their portion of the loan.
At this point our cash flow was so tight that I can still remember the feeling of the pressure and how desperate I felt. Money was so tight that I was going to the post office at 6 AM every morning to check with our mail lady to see if she could give me the mail early so I didn’t have to wait for her to deliver it to our shop several hours later that afternoon.
In May 2010 after much work and implementing new sales and marketing techniques. We found ourself with $1.8 million in signed contracts for commercial projects. Some of the projects we had already started shop drawings on. The big problem was we had no capital in which to do them.