With ICCC education, Facilities Connection Soars

Policymakers often talk of helping “job creators” with temporary programs like tax credits in exchange for new hiring or “Cash for Clunkers.” While ameliorative and perhaps necessary given institutional constraints, the dominant problem that has plagued global industry since the financial crisis hit in 2008 is credit access.

In a macro environment of tight capital, it comes as no surprise that already capital-scarce inner cities are still struggling to grow companies and communities. Of interest to policymakers may be that significant gains can be made just by educating inner city companies on how to attract financing, and then letting the market choose winners.

Facilities Connection, a global modular solutions company from El Paso, Texas provides an excellent case study.

The mention of ‘fast-growing firms’ probably evokes images of nimble Silicon Valley software startups glamorously creating new industries with the ease of Mark Zuckerberg in The Social Network. However, powerful growth occurs often in mid-size firms that see and pounce on new opportunities to execute time-honed value propositions. With the planned expansion of Fort Bliss in 2005 by the Obama administration, Facilities Connection saw such an opportunity. For the first 20 years of its business, it had focused on small commercial businesses and developed expertise at designing turnkey solutions too small for general contractors to complete but too complex for smaller firms to successfully execute. For example, they implement modular walls, furniture, and IT infrastructure. At that critical 2005 juncture, they began the process of deciding how to find capital to execute on their Fort Bliss vision.

Whereas financing was once almost synonymous with bank loans, the last two decades have seen an influx of financial products ranging from mezzanine debt to factoring loans. Helping firms learn about their options represents an underserved market and a lost opportunity for private equity providers to realize excess returns and for companies to attract growth capital.

“The people at ICCC told us what we needed to focus on and what we needed to say in our elevator pitch” says CEO Patricia Holland-Branch. “We changed our presentation and stopped confusing people with information about our security clearances.”

With the aid of tailored ICCC pitch preparation, Facilities Connection increased their working capital $5 million and boosted their revenues to $42 million, a hefty amount for a firm that isn’t a general contractor. They further diversified their financing mix away from their supplier, thereby allowing the company to extend their reach into lucrative IT contracts.

Facilities Connection represents not only a case study for new policy, but, in some senses, a validation of existing government policy and certification procedures. In gaining 8(a) status and locating in a HUB zone, they worked their way up the contracting chain to the point that they merited security clearances. Gaining these clearances serves as a screening mechanism for defense contracting firms that need assurance that their work spaces would be completed both confidentially and satisfactorily. Facilities Connection has progressed to the point that most of their business is now in the federal intelligence space and their aspirations have turned global. As CEO Patricia Holland-Branch says, “We’re thinking big and knowing we can do the big stuff. We recognized there was a whole wider world out there.”

Without new capital sources, without ICCC, this urban company’s growth would not have been possible. See how ICC has helped other companies by reading the newly released impact report. 

BY Sathya Vijayakumar on November 9th, 2011

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