When Innovation Is Expensive

Growth is good and innovation is excellent but it does mean putting money into the business. After a review, it was clear that some changes needed to be made to processes and services, which would be expensive to implement. However, not moving forward could mean no longer being the premier plumbing company for the area.


It was almost a no-brainer to choose to put things in place to let the company be its best. However, there would be a lot of research needed to be sure the money was available and spent on the right things.



Amount of Money Needed to Update

After realizing the company needed updates, the owners jumped to find out what costs would be associated with these changes. In the end, the upgrades for the plumbing company would encompass more vehicles, equipment, and workers. This was going to be a decent chunk of change to get together if there was no need to dip into profits.


Once everything was pulled together, the business determined they would need about $300,000 to get everything updated and keep their claim as the best plumbers in the country.

Which Loan is the Right One?

A traditional business loan was an option and it was considered along with other options. However, alternative funding also seemed like a good choice so more research was done into each of the potential solutions for the need to upgrade and update.


The business priorities were to have flexibility in the loan product, use the assets in a useful way, and not spend too much time trying to obtain the loan. At the end of the day, an asset-based loan seemed like a good option. They did the paperwork and moved forward with this decision.


What Made the Asset-Based Loan the Right Option

An asset-based loan is a great way to offer capital for a business to grow and operate, which is one of the reasons it was appealing in this case. Since the loan is connected to collateral, the requirements to qualify are less than with a traditional business loan. This all seemed like a good way to move forward.


These loans let the business keep its assets but borrow against them. Making payments was the only requirement to avoid losing those assets. However, the cash from the loan let changes be made that allowed the company to be more successful.


How Are Things Going Now?

After securing an asset-based loan, the plumbing business quickly started to update systems, processes, and equipment to use all the innovations in the industry. Workers were trained in new procedures and work went on as usual.


As a result of the asset-based loan, the company has remained named the best in the area. They’re still out there serving customers but can do it better and quicker than they could before. Their loan saved them from becoming just another competitor in a field where that can be a challenge.

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