Dan Surkin owned an IT consultancy for 31 years, assisting Fortune 100 companies with complex problems. After spending 11 of those years caring for his mother through several surgeries and illnesses, he decided he wanted to focus his time – and his career – on something more meaningful: Dan became owner / operator of a ComForcare Home Care franchise in Lower Bucks County, PA. Together with his son Louis, Dan launched his business with a mission to make life easier for people coping with chronic medical conditions, recovering from illness or injury, or dealing with the challenges of aging.
That was almost exactly three years ago. Very soon after launching their business, Dan and Louis began to experience enormous growth. In July 2014, his franchise was listed as #19 out of 180 ComForcare franchises across the country.
“With that growth comes a large and quicklygrowing payroll,” said Dan, explaining that his business has 30-day payment terms, which restricted the cash flow Dan needed to pay his employees every two weeks. “We’d hired so many people and it went from ‘Wow, look at our growth!’ to ‘Uh oh, look at our payroll.’”
Dan urgently sought a loan to enable him to continue his business. He said he knew what he was getting into with what he describes as loan sharks he found on the Internet, but he needed money fast.
“We were growing so fast, but a budding business that can’t get money at good interest rate winds up crippled. We were paying off high interest loans, then having to go right back to them. Some demanded 50 percent interest plus fees! Even with a reasonable margin, those guys that charge big interest will eat into your profit. I wasn’t sure I could stay in business.”
Dan’s search for a better loan spanned many months. Meanwhile, he continued to struggle to make payroll while working to develop his business. He knew he needed a different solution to allow him to keep up his success.
A referral led Dan to Dealstruck. He took out a line of credit against his accounts receivable, allowing him to consolidate his debt. The Dealstruck Asset-Based Line of Credit allows a business to pay down its credit loans at any time throughout the month as it collect payments from its customers. These repayments are immediately applied against the line, resulting in increased availability and a lower burden of interest at the end of the month.
Dealstruck also provided Dan with a fixed two-year term loan. The Dealstruck Term Loan provides growth capital, enabling profitable businesses to continue expanding.
“When banks say no because you’re not profitable enough, you start borrowing against your personal savings. As a new business, you don’t have any reserve; so high-interest loans make it impossible to grow. We have accessed a substantial amount of money via multiple types of Dealstruck loans. This has given me the ability to stay in business.”
Before starting his ComForcare franchise, Dan said he had a lot of experience building a business through his IT company, but he had not experienced the challenges that come along with owning a franchise.
“You think when you buy a franchise, that if you follow the recipe of the franchise model with the right billing rates, you’ll make certain margins – and you blindly believe all will be fine. You generally think that if you build a business, it will all be fine. The people who sell franchises sometimes understand the difference between good and bad sources of money, but franchise buyers don’t often get resources or guidance on how to handle enormous growth or the challenges they’ll encounter. Growth can be a double-edged sword and not being able to make payroll is incredibly scary.”
In early 2015, ComForcare moved up to #18 out of 174 franchises. After experiencing an increase in business since his original Dealstruck loans, Dan increased his loan amount from $80,000 to $125,000 to assist with accounts receivable. His franchise has grown to 112 employees with plans to hire more each month. There are many ComForcare and other similar franchises through the United States and Canada, but Dan’s continues to operate near the top.
“We closed quickly with Dealstruck at a very important time. It was incredibly stressful. I was trying to figure out how to keep my business going, and thanks to Dealstruck, for the first time, I became optimistic.”